Atlantica Sustainable Infrastructure PLC

NASDAQ:AY

Earnings Call Transcript 2018-Q3

[Operator]

Good day, everyone. Welcome to the Atlantica Yield Third Quarter 2018 Financial Results Conference Call. Atlantica Yield is a total return company that owns a diversified portfolio of contracted renewable energy, power generation, electric transmission, and water assets in North and South America and certain markets in EMEA. Just a reminder that today's call is being webcast live on the Internet and a replay of this call will be made available on the Atlantica Yield corporate website.

Atlantica Yield will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risk and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today’s earnings presentation or the comments made during this conference call in the risk factor section of the accompanying presentation on our latest reports and filings with the Securities and Exchange Commission each of which can be found on our website. Atlantica Yield does not undertake any duty to update any forward-looking statements.

Joining us for today’s conference call is Atlantica Yield’s CEO, Santiago Seage; and CFO, Francisco Martinez-Davis. As usual, at the end of the conference, we will open the lines for questions.

Mr. Seage, you may begin.

[Santiago Seage, Chief Executive Officer]

Good afternoon, and thank you very much for joining the call today. We will start on Page 3, where we will review the key messages for the quarter. This quarter, we have delivered what we consider our outstanding operating results. Our revenues for the quarter have reached $323.8 million, an increase of 11% year-over-year. While further adjusted EBITDA, including unconsolidated affiliates has increased by 15% to more than $271 million.

Cash available for distribution in the third quarter was very solid as well reaching approximately $43 million driving the recovery for the first nine months of 2018 up to $132.5 million. In addition, our Board of Directors has declared a quarterly dividend of $0.36 per share, representing an increase of 24%, compared to the third quarter in 2017.

And finally, we continue to execute on our plan to delivery sustainable equity capital growth over the next few years. We are pleased to announce today a number of accretive transactions for a total amount of $245 million in equity value with an estimated CAFD Yield of approximately 13%. We will offer further details about those acquisitions in a few moments.

If we move to Page 6, we see that revenues for the first nine months reached nearly $837 million, an increase of an 8% versus the same period in 2017. Further Adjusted EBITDA, including unconsolidated affiliates reached $714 million, a 14% increase. CAFD, as I mentioned before for the first three quarters reached more than $132 million, while the third quarter at CAFD was $42.7 million, a 16% increase versus the same quarter last year.

In summary, we are thrilled with the strong results achieve in the third quarter and in the first nine months of the year demonstrating the solid operating performance of Atlantica and the advantage of having a diversified portfolio, where a significant percentage of our revenues is based on availability and not only on generation.

On Page 7, we see that our fleet of assets has delivered very good numbers in the first nine months of the year, both by segment and by region. In North America, both revenues and EBITDA have increased with respect to the previous year. It is worth mentioning the strong performance in the third quarter of our U.S. Solar assets, which delivered the best third quarter ever, with both Solana and Mojave contributing to this growth. In fact, the capacity factor for the period reached a 39%.

In South America revenues increased by 2%. Thanks to the continued solid performance of our assets. EBITDA decreased year-over-year due to the $10 million one-off impact we had in the first nine months of 2017. If we don’t take that into consideration, EBITDA in South America would have increased by a 3% year-over-year in-line with revenues.

In our EMEA region, revenues increased by 9%, mainly thanks to higher production in our solar plant in South Africa. We have also benefited from the appreciation of the euro against the dollar, since we are converting revenues into dollars at a higher average exchange rate in this period. The increase in EBITDA is also due to the same effects.

Looking below at the results by business sector, we can see similar effects. In renewal energy, revenues increased by a 10%, thanks to higher revenues throughout the portfolio, including the good performance of the U.S. solar assets I mentioned before. In natural gas, our Mexican assets continues to show excellent performance. The EBITDA decrease is due to a scheduled major overhaul at the beginning of next year.

Operation and maintenance costs tend to be higher in the quarters before such major scheduled maintenance. If we look at our Transmissions lines, revenues remained stable, while the variation in further adjusted EBITDA corresponds to the one-off, I mentioned before in 2017. Finally, our water segment keeps showing strong EBITDA levels.

If we look now at the following slide, Number 8, we can review the key operational metrics of our assets. Electricity produced by our renewable assets reached 2,555 gigawatt hours in the first three quarters of 2018, in-line with the production generated in the same period last year. Production in the third quarter was 9% higher than in the third last year. Thanks again to the strong performance of our solar assets in the U.S. and in South Africa.

Overall, as you can see, our renewal generation assets delivered very strong operating performance this quarter. If we look at our availability-based contracts, we can see that ACT keeps showing consistent performance with very high availability levels. Transmission lines and water assets continue performing very well with availabilities once again very high.

I will now turn the call over to Francisco, who will take you through the financial figures.

[Francisco Martinez-Davis, Chief Financial Officer]

Thank you, Santiago, and good afternoon everyone. Let's move to Slide 9 to walk you through our 2018 cash flow for the first nine months of 2018. Our operating cash flow reached $338.3 million, improving over 3% from the first nine months of 2017. This was mainly due to better operating results.

On the other hand, we experienced an increase in negative variations in working capital, mainly caused by certain delay in collections, most of which have already been collected in October 2018 and high obtainments of variable O&M fees as a result of higher production levels in Spain in 2017.

Net cash provided by investment activities amounted to 36.2 million in the first nine months of 2018. As we discussed on the first quarter call, this figure includes 60.8 million we received from Abengoa back in March in relation to the DOE consent, which was used to repay project debt.

Net cash used in financing activities for the first nine months of 2018 amounted to $282.1 million and corresponding mainly to the scheduled repayments of principle of our financing agreements. We also paid a 107 million of dividends to shareholders in non-controlling interest. Finally, the net change in consolidated cash during the first nine months of 2018 was 92.4 million.

On the next slide, Number 10, we would like to review our net debt position and corporate cash at the Holdco level. We closed the first nine months of 2018 with corporate cash of a 135.1 million. Furthermore, we also have 155 million available under our existing revolving credit facility. Net corporate debt as of September 30, 2018 was 506.7 million, similar to our net corporate debt as of December 2017.

Net project debt as of September 30, 2018 was 4.6 billion, which represents a 350 million reduction versus December 2017. With this, our net corporate debt to CAFD pre-corporate debt service ratio remains at 2.2 times well below internal target of three times. So, as you can see, we have enough liquidity to finance the acquisitions we have announced today.

I will now turn the call to Santiago, who will go over the strategic update and will provide further detail on the equity investments that we have announced earlier today.

[Santiago Seage, Chief Executive Officer]

Thanks. On Slide 12, you can see that our board of directors has approved a quarter dividend of $0.36 per share for Q3 2018. This represents an increase of 24%, compared to the Q3 2017 dividend and an increase of $0.02 or a 6% compared to the last quarterly distribution. As you can see on this chart, we have significantly increased quarter-over-quarter our dividends during the last two years. This demonstrates the confidence we have in our business and in our accretive growth prospects.

Finally, I would like to spend few minutes providing further details on the accretive investments that we have announced today, which we believe will contribute to deliver sustainable capital growth over the following years. We have announced several accretive investments for a total close to $250 million in equity value with an estimated CAFD yield of around 13%, an enterprise value to EBITDA multiple below 8.5x.

The new assets announced today are a perfect fit for our portfolio and for our value proposition. They include several transmission infrastructure assets and a water desalination plant. All the assets to be acquired have long-term U.S. dollar denominated contracts with credit worthy of takers and are located in countries where we are already present. But most importantly, these acquisitions demonstrate that Atlantica has access to several attractive sources of growth.

First, we have been able to secure two organic growth opportunities in transmission assets in Peru. And we have invested in an existing asset ATN2 by repurchasing a high cost tranche of U.S. dollar project debt. In second place, we have also agreed the acquisition of two assets from third parties, consisting in transmission line with a substation in operation in Chile and a natural gas transportation platform in Mexico.

And finally, we are currently in negotiations with Abengoa under the ROFO Agreement for the potential acquisition of our 51% stake in the Tenes water desalination plant. One of the assets included in our regional ROFO agreement. If you turn to Slide 14, we can review these investments starting with the transmission assets in South America. The first asset is an expansion of our ATN backbone transmission line in Peru. This first expansion consists in the acquisition of a power substation and two transmission lines in Peru.

The substation will connect a mine to our ATN line. The asset has a U.S. dollar-denominated 15-year contract in place and the closing of a transaction is subject to be asset reaching commercial operation, something that is currently expected before the end of the year. The second asset is our second expansion, as well in Peru.

In this case, we have reached a preliminary agreement to acquire certain transmission assets that are in operation and we’re connected recently to our lines. Our investment is estimated at around $20 million and the final purchase agreement has not been signed yet. Also, as previously announced, we invested $24 million in ATN2 to replace a high cost tranche of project debt.

Finally, and still within the transmission lines investments, we have also reached a preliminary agreement to acquire a transmission line in operation in Chile. Close to one of our existing assets. The acid generates revenue under the current regulation in Chile and a total investment to be made by us is estimated at around $10 million. The purchase agreement has not been signed yet either.

Now, if we move to the next slide, we will be reviewing the acquisition of PTS, a natural gas transportation platform in Mexico, currently under construction with an installed compression capacity of 450 million standard cubic feet per day located in the same basin that delivers natural gas to our existing ACT plant.

The service agreement or PPA if you want with the client with Pemex is a 11-year take or pay agreement starting in 2020 under which Pemex will deliver low pressure gas to our assets and we will provide them compressed gas back. The asset is expected to reach COD in late 2019 or early 2020. This asset represents a very attractive opportunity for us.

First, it has a very strong off-taker that is currently an existing customer with whom we have a strong business relationship. Second, we will not be taking commodity risk as the client will be supplying us the natural gas. And finally, the construction is being performed by a strong partner with a solid track record in these kind of assets.

Additionally, the asset has potential for a significant upside. In first place, the asset has additional capacity, compared with the service agreement signed with Pemex. So, if the client requires more volume, we will be able to supply it from the existing assets without an additional investment. Additionally, we believe there is a possibility of a future extension of the service agreement in place.

Our total equity investment in PTS will be around 150 million in several stages. In October 2018, we have acquired a 5% ownership in the project and once the asset enters into commercial operation, a year or a bit more than a year from now, we will be acquiring an additional 65%. And finally, we plan to acquire the remaining 30% one-year after commercial operations subject to required approvals. For all these reasons, we believe that this acquisition is attractive for Atlantica and will support our CAFD growth in the future.

Finally, if we move to Slide number 16, we can see how we are crystallizing our partnership with Algonquin. In first place, AAGES has entered into an agreement with Abengoa to transfer ATN3 to AAGES upon the satisfaction of certain conditions. As you may remember, ATN3 is a transmission line in Peru, which is to receive U.S. dollar index revenues under our 30-year concession agreement with the Peruvian administration.

The asset transfer is expected to happen in the first part of 2019 before the conditions are for closing our math. As you remember, this asset is included in our ROFO agreement in our AAGES ROFO agreement and we are currently working with AAGES and their shareholders on the structure of this investment, which might result in Atlantica investing a small stake in the asset before COD, thus securing very attractive opportunity with clear synergies with our existing transmission line portfolio. This ATN3 will be the first asset of what we hope will be a long list of AAGES projects to be developed and built over the next years and where we have a ROFO agreement.

Additionally, our partnership with Algonquin goes beyond AAGES, and in fact, we have been collaborating with Algonquin on several co-investment opportunities. These opportunities include assets in operation, but include as well assets under earlier stages. It is worth mentioning the progress achieved in one of these growth opportunities in the U.S.

This is a wind plant, 200 megawatts more or less wind plant in the U.S., which is expected to reach commercial operation during the first half of 2020 and the investment would be made jointly by Algonquin and Atlantica Yield, although we have not agreed yet the specific structure and we are still working on these opportunities.

We do not know if this specific opportunity will materialize or not, but this example demonstrates the strong partnership with Algonquin and how they are supporting a growth strategy in the long-term, not only through AAGES, but also by directly co-investing with us in the assets or looking for opportunities to co-invest in assets leveraging the advantages of each Algonquin and Atlantica.

In summary, after another very strong quarter, and after announcing several accretive investments, we are more confident than ever in the value creation potential of Atlantic. Thank you for your attention. We will now open the lines for questions.

Operator, we are ready for Q&A.

[Operator]

Thank you. [Operator Instructions] We’ll year first today from Julien Dumoulin-Smith with Bank of America.

[Julien Dumoulin-Smith, Bank of America]

Hi good afternoon, can you hear me?

[Santiago Seage, Chief Executive Officer]

Yes, we can.

[Julien Dumoulin-Smith, Bank of America]

Excellent. Alright, well congratulations again. A few different questions. First, starting on the performance for the quarter and year-to-date, how do you think about Solana and Kaxu and analyzing that relative to what you would have done if those assets were working sort of at ongoing levels? And has that annualized into 2020 or into 2019 given what you said earlier about some higher operating outage expense?

[Santiago Seage, Chief Executive Officer]

Thanks Julien. Regarding Solana and Kaxu, the third quarter has been very strong as I mentioned before, and therefore if the performance was the same during a full-year those two assets will be performing let’s say where we technically expect them to perform. What we need now is to make sure that every quarter is as good as the third quarter we saw.

[Julien Dumoulin-Smith, Bank of America]

Yes. But how do you think about the net factors here going into next year, right. So, obviously higher outage expense, but also continued performance if you were to think realizing kind of normal ongoing performance at Solana. And maybe a secondary question there would be, how do you think about 2018 and where [ph] year-to-date results position you with respect to guidance?

[Santiago Seage, Chief Executive Officer]

So, regarding guidance, we believe we are on track to meet our CAFD guidance. In terms of performance or the impact of Solano and Kaxu in 2019, at this point in time we are optimistic regarding the technical performance. Obviously, there is, the first thing you need to do is make sure your assets are performing properly, which currently for these two assets is the case. We need to maintain that. And after that there is a certain delay until you actually are able to make distributions or your full distribution. So, we're still – I think it’s too soon to talk about the impact on CAFD, especially this year, but obviously this is very good news and what we need is to make sure that the assets continue performing as they did this quarter.

[Julien Dumoulin-Smith, Bank of America]

Got it. Okay. I’ll leave them behind. Can you discuss a little bit more about the composition of the 245-equity investment that you all talked about here? It seems like PCS, if you were to summarize about 150 million of this, if about 50-ish million between Peru and Chile, ATN3 is not included in that number from what I gather. And then, how much of an investment is in water in Algeria if you can help back into that or I suppose between water and ATN1 expansion?

[Santiago Seage, Chief Executive Officer]

More or less the split that you mentioned is correct. ATN3 is not included because today we are not announcing any investment in ATN3. Today, we are sharing with you an update regarding what AAGES is doing in ATN3 and telling you that is including the ROFO, but in the numbers we shared with you, we do not include ATN3. So, more or less, the split, as you mentioned Julien is, 150 for PTS a 24 more or less for water and the remaining is for transmission lines in Chile and Peru.

[Julien Dumoulin-Smith, Bank of America]

Got it. How do you think about the cadence of these assets coming online, and how that will impact your CAFD? So, you talked a 13% CAFD yield, when do we get a run rate in that CAFD yield and how do you think about where you stand today and getting up to that run rate level, I suppose if you look at the 245 and put a 13% on it, up 32 million of incremental CAFD, how to get from here to there?

[Santiago Seage, Chief Executive Officer]

So, out of these assets, all the assets except for PTS should be delivering CAFD next year. Obviously, each year is different, but they all should be delivering and something is similar to the run rate next year. The exception is PTS, which will go – will start commercial operation as I mentioned before in late 2019 or early 2020. So, you should not expect run rate from PTS until 2020.

[Julien Dumoulin-Smith, Bank of America]

Got it. So, the bulk of his ex-PTS, so if you were to think about it, about a hundred-ish million of the 245 should be next year give or take and then by 2020 you should have the remaining 150 million-ish contribution, is that a fair statement?

[Santiago Seage, Chief Executive Officer]

It is subject obviously to approvals of competition authorities and so on. Yes.

[Julien Dumoulin-Smith, Bank of America]

Excellent. Last quick question if you can, how do you think about valuation at this point, specifically in Spain with the de-risking going on, obviously a lot of constructive developments there on the regulatory side, how do you think about what you're seeing out there in the marketplace? You see the number of transactions in European renewable portfolios at large weather in Spain or elsewhere, so can you comment a little bit about valuation transactions and how you think about realizing value on that portfolio, specifically over time?

[Santiago Seage, Chief Executive Officer]

So, in general valuations of renewable energy in Europe and specifically in Spain, as you mentioned clearly have improved over the last few years, and with positive developments regarding regulation in Spain, where the regulator has been publishing reports with their point of view regarding the reasonable return for the new period starting 2020. What we see is that buyers and sellers let us say are more optimistic and have been able to close transactions or high valuations. So, we do believe that that market is doing well and should be doing even better.

Obviously, we will be open to opportunities unlike every single asset we own at any point in time, and at certain prices we will be seller of any asset obviously if we believe that we are getting more value by selling than by owning. So, I don't think from that point of view. The Spanish assets are different from any other asset anywhere.

[Julien Dumoulin-Smith, Bank of America]

Got it. Alright, well I’ll pass it on at this point. Thank you very much.

[Santiago Seage, Chief Executive Officer]

Thank you, Julien.

[Operator]

We'll hear next from David Quezada with Raymond James.

[David Quezada, Raymond James]

Thanks. Hello everyone. My first question here is just on the transaction you announced today. Wondering if you could provide any other commentary on your balance sheet and funding outlook, once the project or once these investments are completed, and how does that fit with the potential to try and execute transaction with AAGES over the next couple of years potentially?

[Santiago Seage, Chief Executive Officer]

So, the [nearly $250 million] of equity investment that we discussed today, our plan is to execute those acquisitions with cash on hand unavailable financing under the system facilities and therefore further investments with AAGES or anybody else we will be seen, but in principle that’s how we will finance 245 we mentioned today.

[David Quezada, Raymond James]

Okay, great. Thank you. And then any other color you can talk about in terms of how they affect your footprint, like is there any change to your average, weighted average contract-life going forward?

[Santiago Seage, Chief Executive Officer]

So, the good thing about this acquisition we believe is that they are happening in assets that are very similar to an existing portfolio. So, these are long-term contracts in U.S. dollars in countries where we operate on many of them with very clear synergies with our existing portfolio. We are looking at transmission lines that are physically connected to existing assets. We are talking about an asset in Mexico that has the same client and is located very close to an existing asset.

We are talking about the water plant that is very similar to water plants where we are already invested and therefore, we believe that we are not changing our footprint on the contrary. We remain let us say fairly focused where we were and the synergies for us are very obvious. The average life probably is going to be slightly shorter because one of the assets we are purchasing PTS has an 11-year contract at this point in time but the effect on the overall portfolio should not be very meaningful.

[David Quezada, Raymond James]

Okay, great. And then maybe just a follow-up question on Spain tariff and the CNMC, their final report. I'm wondering if you have any thoughts you could share on the methodology that CNMC used in arriving at the 7.09%? And when you get a chance to provide your feedback, do you see any opportunities to argue for a number higher than that in the final determination from the government?

[Francisco Martinez-Davis, Chief Financial Officer]

So, to give everybody a bit of a background in case somebody is not up to speed with regulation in Spain, existing regulation until the end of 2019 talks about a reasonable return of 7.4% that’s a project IRR let’s say in the regulator as David just mentioned, published a report proposing initially a 7.04% that was a draft report a few months ago, and last week the regulator published a final report that proposes a 7.09%. So, there is a slight decrease versus the 7.4%. That change moving from 7.04% to 7.09%, that change was the result of our consultation process where anybody who wanted was able to provide feedback and we did provide feedback.

So, this number now is the final recommendation from the regulator. The methodology used is a WACC, it's a classical, let's say, WACC methodology. Now, that report in its final form is out there and now it’s up to the government, probably in 2019 to actually act on it. On let’s say from our point of view, we have allocated for a high number, at the same time, the adjustment is fairly moderate, but what I think is important now is to see if the government takes action in numbers similar to what the regulator has proposed or hopefully higher.

[David Quezada, Raymond James]

Excellent. That’s very helpful, thank you. I’ll get back in the queue.

[Operator]

[Operator Instructions] We will go next to Deutsche Bank's, Jonathan Arnold.

[Jonathan Arnold, Deutsche Bank]

Good afternoon.

[Francisco Martinez-Davis, Chief Financial Officer]

Good afternoon, Jonathan.

[Jonathan Arnold, Deutsche Bank]

Could you give us any sort of granularity around the variance or variability in the CAFD yields on these various deals, it’s 13% on average, but is that a number – is that all around that number or if we got some different numbers in the mix there?

[Santiago Seage, Chief Executive Officer]

So, the numbers are fairly similar across the assets in terms of CAFD yield and in terms of all the other metrics you would look at. For these acquisitions we announced today, we have been working on assets where we believe we are going to be achieving clearly accretive metrics. So, all the assets including here have similar numbers to the average we made public.

[Jonathan Arnold, Deutsche Bank]

Can you shed a little more light on PTS where you are not going to put in the final, I guess 30% of the investment until a year after COD? So, will you just have a lower share for the first year or is that some other way to think about that?

[Santiago Seage, Chief Executive Officer]

That’s the way to think about it. As this is an asset that is going through construction, our approach has been to, let’s say make the investment in several stages. So, before committing all the capital we want to see the asset in operation for a year. That’s a reason for investing that last 30% a year after commercial operation.

[Jonathan Arnold, Deutsche Bank]

So, the cash flow will sort of tick up when you have the cost of financing that last piece at the same time, basically? Assuming it runs right?

[Santiago Seage, Chief Executive Officer]

So, I don't know if I understood properly the question, but year one, the assets should be generating the CAFD should be close to run rate. Of course, in that first year we will receive a 70% because we will own a 70%, and after that we would receive 100% subject to the approval.

[Jonathan Arnold, Deutsche Bank]

That's clear. Thank you. And I was just wondering, you guys have got an analyst meeting coming up in New York in less than a month or around the month I think, could you give us some sense of what you're planning to do there?

[Santiago Seage, Chief Executive Officer]

Sure. Actually, on December 6 in New York we plan to have an Analyst and Investor's Day. So, obviously you are all more than welcome to attend. Our intention there is to update our plans going forward, and to spend some time talking about how we plan to allocate capital going forward, what opportunities we see in the different fronts, geographies and sectors where we work and try to share and update with you our forecast for the next few years. It will also be an opportunity for you to get to know some people within our management team and hopefully we will be inviting as well Algonquin, our main shareholder and sponsor now, so that we can talk with you regarding AAGES and opportunities to collaborate with Algonquin.

[Jonathan Arnold, Deutsche Bank]

Great. Look forward to and thank you very much.

[Santiago Seage, Chief Executive Officer]

Thank you.

[Operator]

And we have a follow-up question from Julien.

[Anya Shelekhin, Bank of America]

Hi. This is actually Anya filling in for Julien. I just had a couple of follow-up questions; can you hear me?

[Santiago Seage, Chief Executive Officer]

Yes, we can Anya. Go on.

[Anya Shelekhin, Bank of America]

Okay. First one is, just, how are you expecting dividend growth to trend through the end of the year and also for 2019 as well potentially? And then are you still targeting the 80% payout ratio and is that for the full-year, and any color on that would be helpful?

[Santiago Seage, Chief Executive Officer]

So, regarding payout ratio, yes, we are targeting an 80%. Actually, with the $0.36 we announced today you will see that we are not far off from that number. So, our intention is to continue increasing our dividends working with that 80% payout ratio. Regarding 2019, we always provide guidance a bit later, when we announced results for the full-year and this – in that regard, I would not comment regarding 2019 until we provide guidance if you allow me.

[Anya Shelekhin, Bank of America]

Okay. And then my follow-up question, second question is, could you provide any sort of timeline for the refinancing of the 2019 is?

[Santiago Seage, Chief Executive Officer]

Well the refinancing of the high-yield is something where our finance team has been working for some time. Their intention will be to refinance that bond whenever they believe that the conditions are right from a market point-of-view. We have some time there and we will see or our finance team with advisors will decide when is the right time.

[Anya Shelekhin, Bank of America]

Okay, great. Thank you.

[Operator]

[Operator Instructions]

[Santiago Seage, Chief Executive Officer]

If we have no more questions, operator, we can leave it here.

[Operator]

We do have a question from Abe Azar with Deutsche Bank.

[Santiago Seage, Chief Executive Officer]

Okay, sorry.

[Abe Azar, Deutsche Bank]

Hi, guys congratulations?

[Santiago Seage, Chief Executive Officer]

Thank you.

[Abe Azar, Deutsche Bank]

My question was, do you expect to use any of the cash at project companies to make some of these investments than in Chile or Peru, for example or Mexico?

[Santiago Seage, Chief Executive Officer]

So, at this point in time, as I mentioned before, the intention would be to finance the investments with cash on hand at the corporate level and available financing capacity.

[Abe Azar, Deutsche Bank]

Thank you.

[Operator]

And we have no other questions at this time.

[Santiago Seage, Chief Executive Officer]

Thank you very much to everybody.

[Operator]

And that will conclude today's conference. Again, we do thank you all for joining us.