Empresas Copec SA
SGO:COPEC
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Good morning, everyone, and welcome to Empresas Copec's Third Quarter 2018 Results Conference Call. Today's presentation and the third quarter 2018 earnings releases are available on the company's website at www.empresascopec.cl and also on our Investor Relations website at investor.empresascopec.cl.
Before we begin, I would like to remind you that this presentation may include market outlooks and forward-looking statements, which are based on the beliefs and assumptions of Empresas Copec's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events, and therefore, depend on the circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Empresas Copec and that could cause results to differ materially from those expressed in such forward-looking statements.
This presentation contains certain performance measures that have been adjusted with respect to the IFRS definitions, such as EBITDA. I will now turn the call over to Mr. Rodrigo Huidobro, Chief Financial Officer of Empresas Copec. Please go ahead, sir.
Okay. Thank you very much. Hello, everyone, and thanks for joining this call today. We will be taking a look at the results of the third quarter for Empresas Copec. As usual, I'm joined today by our people from our Investor Relations Department, Mr. Cristián Palacios, in particular, and people also from Arauco, specifically, Mr. Gianfranco Truffello. Both of them will be helping us out with any questions you might have at the end of the session.
Let us start on Page 4, where we are taking a look at the results of this quarter in a historical context. You can see there that EBITDA has gone up to $745 million, which is among the highest figures recorded by the company. It is slightly down with respect to the figure last quarter, but definitely up, 17% up, with respect to the comparable quarter last year. As we will see, this is basically driven by a good performance in the forestry sector. Regarding net income, this has gone -- in the quarter, it has ended up in $308 million, which is in line with what we recorded in the third quarter last year, which was $311 million and a little down with respect to the $335 million that we recorded in the second quarter last -- in the second quarter of this year. Just to remind you, the third quarter last year was influenced by some one-off effects, in particular, the sale of one of our associate companies in the fishing sector and some reversal of provisions in Arauco related to the wildfires.
In -- on Page 5. We can see healthy EBITDA is composed and also has driven the most important variations in EBITDA with respect to the third quarter last year. As you can see there, the increase is basically explained by Arauco, which goes up by $131 million and offset to some extent by the subsidiaries in our fuel sectors, which are hit in this particular quarter by exchange rate going up and also a drop in margins. More on that we will see going forward.
In terms of composition of EBITDA, we can see, as always, that Arauco and then our fuels division subsidiary companies make up the bulk of our EBITDA generation. EBITDA is up by 16.7% with respect to the comparable quarter last year.
On Page 6. We have a similar analysis with net income. Once again, the increasing net income is driven basically by Arauco. Arauco has recorded high results related to -- specifically to a very good pricing scenario for pulp as we will see going forward. This is, to some extent, passed by weaker performance at our fuel subsidiaries, and particularly at Copec, which goes down because of margins and the effect of the exchange rate. And also a decrease in the fishing sector because, as we said, of the one-off effect that we recorded last year related to the sale of Selecta. To the right-hand side, once again, the composition of net income is basically made up of Arauco and our fuels division subsidiaries, including in this case our natural gas subsidiaries, which do not consolidate but contribute to the net income. I am referring to AGESA and Metrogas.
On Page 7. We are drilling further into the numbers. The consolidated income statement. You can see there that operating income goes up by $118 million. This stems basically from the operating performance at Arauco, which relates in turn to higher revenues in all business lines, and especially driven by the pulp division. Once again, this is offset, to some extent, by lower resulting Copec because of the exchange rate effect and lower margins.
In terms of nonoperating income, we are seeing lower results in associates because of the sale of Selecta last year. We are seeing greater other expenses in Arauco. This is because last year in the third quarter, Arauco reverted part of a provision linked to the forest fires, which took place at the beginning of the year. And we are also recording a more negative effect coming from exchange differences, which has to do with the effect of the exchange rate on some assets that we hold in local currencies.
In terms of the ratios, which we are showing on Page 8, you can see our return on capital employed going up. This quarter, EBITDA margin stable, but going slightly down due to a drop in the fuel sectors, [ basically ] . And net debt to EBITDA continuing its downward trend that started back in the fourth quarter of 2016 after we ended the [ expansion ] phase that took place back then. So as you can see there, we have moved on with a downward trajectory, and we have continued to be moved down in this particular quarter, where we have reached 2x. So net debt to EBITDA standing now at 2.
In terms of our maturities and our debt schedule for the coming years, you can see that it is very well balanced, and we have actually flattened it out a bit following some refinancings that took place over the last few months.
We have one spike there in 2019 that we are working on precisely now and that has to do with a maturity, which will affect Copec and some debt that Terpel has taken on for its acquisition of the ExxonMobil assets. We are working on the refinancing of those 2 maturities at this moment.
Now we're moving into some more details regarding our first division. So let us please turn to Page 11. We are presenting the net income of Arauco there. You can see that net income has gone up by $72 million, reaching $221 million. We are seeing a higher operating income. This has to do with revenues growing in pulp and wood products. And the pulp revenue basically has to do with, as you well know, a very good pricing scenario that has held on during all of this year, basically, for both hardwood and softwood. We'll drill into that a bit further on.
In terms of our wood division, we are seeing higher sales volume in panels, which basically stem from the consolidation of the assets of Masisa in Brazil, the assets that we bought at the end of last year. In terms of nonoperating income, as we already commented, we have greater -- other expenses, which are negative this year compared to a positive line last year, and this has to do with the onetime effect of the reversal provisions related to the wildfires in the third quarter of last year. We have negative exchange rate differences. This is basically the effect of a rising exchange rate of depreciating local currencies on assets that we hold in local currencies, such as cash and some accounts that we're holding in local currencies.
In terms of other income, we are recording a drop, and this has to do with the revaluation of biological assets, which is lower than last year -- this year. And finally, rising taxes which has to do with a better performance.
Some comments on the pulp division on Page 12. You can see there, on the lower right-hand corner that EBITDA coming from pulp recorded [ $396 ] million compared to $408 million last quarter, and compared to $251 million in the third quarter 2017. So we are increasing significantly with respect to the third quarter of last year, but dropping a bit with respect to the second quarter of this year. The increase, of course, has to do with a much better pricing scenario, actually year-on-year, as you can see in the table down there. Year-on-year, prices have gone up on this quarter on average by almost 30%, but sales volumes have gone down a bit, 5%, with respect to the third quarter of 2017.
Regarding the comparison with last quarter, you can see that prices are quite stable. And you can see also that volumes go down a bit. Just a reminder that in the third quarter 2017, we achieved sales of more than 1 million tons on that quarter, which is probably one of the highest figures we have ever recorded for sales. So comparison base is quite high. In terms of costs, as we've mentioned there, we have seen some increase in basically all of fibers, and this is related to higher costs of wood and also to higher costs of chemicals.
On Page 13. We are giving some information about the growth of world demand and world inventories as well. You can see that world demand has been very healthy this year, in particular, in some areas such as China and Western Europe, where we have seen growth rates of 7% and 4.7%, respectively. Aggregate growth for the year has been 2.7% as of September this year. In terms of inventories, we are seeing figures that are pretty much in line with historical averages, 41 days for hardwood and 33 days for softwood.
A brief word on the outlook for pulp for the coming months on Page 14. We are seeing some weakness in paper demand in Q4. This is most probably related to uncertainties brought about by the commercial wars between China and the U.S. So we have seen paper demand going down, and that in turn, of course, affects demand and prices for pulp. In [ effect, ] we've seen some pulp price adjustments for November. We have seen a drop in softwood, which has gone down from mid-19, which is a level that has held very stable for several months, and that has dropped to $830. So $60 per ton down in softwood. In hardwood, we have announced a $10 per ton drop, but still negotiating with our clients that drop. So we haven't published that figure there, but what announced is $10 less for November in hardwood. In spite of all this, we continue to be positive and optimistic about the medium term, basically because of the lack of supply if -- of new supply coming into the market. In the wood division, we will use some data on Page 15. You can see that EBITDA ended up at $103 million for this division, $103 million that compares positively with the second quarter, so it's up from $101 million to $103 million, but it's slightly down with respect to the third quarter 2017. This basically has to do with the drop in price, so if prices are on average 7% down, with respect to the third quarter last year, all of that is offset by volumes going up in panels and by prices going up in [ sawn ] timber as well. But all in all, we have a drop in the EBITDA coming from wood products. You can see there is some more details for those production and sales volumes for the different kinds of wood products. You can see that production is held steady. Production is going up in panels, basically because, as we mentioned before, because of the incorporation of the assets of Masisa in Brazil. You can see the volumes for sawn timber going down actually by 5.8% with respect to the second quarter last year. And you can see also volumes for plywood going down a bit, both with respect to the last quarter and with respect to the third quarter last year.
A brief word on each of our main markets. On Page 16. We are presenting some data about the North American market, which is now up to 45% of our total sales. We can see -- we continue to see a positive trend in housing starts, although we have stabilized for the last few months, still standing at 1.2 million units per year as of October. Stable markets, in general, in particleboards and MDP. This -- the sales of Arauco are going to increase in these lines, when Grayling -- when the Grayling Project [ starts operating ] . We will have more info on that further on.
In terms of remanufactured products. The markets and prices have been pressured upwards because of lower supply from China and Brazil. We have good prospectus in relation to this market, always low subject to what happens with the trade negotiations between China and the U.S.
In terms of plywood, slightly weaker demand, basically related to seasonality coming from the winter months.
On Page 17. We have some comments on our other main markets. In Latin America, in general, we've seen stability. Brazil quite healthy in terms of volumes, 5% or 6% up compared to last year. Although we're still expecting some capacity to enter the market at the end of this year and at the beginning of the next year. So still a question mark on that.
In Argentina, the main driver of market has been the devaluation of the local currency. This has affected sales and prices, however, this affect is offset to a certain extent by the fact that we are beginning to export from this market. And of course, the local currency devaluation gives some more competitiveness to our exports. Chile has held quite stable, and we are selling a good mix of products with quite healthy sales.
In Asia, stability in general, and a very strong performance of Japan, in particular. In Europe, stability as well. We're expecting demand and prices to stay flat. And we could even see some improvement in volumes. What we're seeing now is that some local producers are running their facilities at maximum capacity. And finally, Middle East has shown a strong demand for the whole of this year, and we expect it to continue that way.
Moving on to our fuels division. We are presenting that on Page 19. In the case of Copec, net income has dropped and that has to do with lower operating and nonoperating income. In terms of operating income, basically 3 or 4 major factors. One is lower margins in Chile, especially in the industrial channel, and that in turn has do with less opportunities for importing fuels during this quarter. Together with that, we have seen a drop, quite a significant drop, in the [ FIFO effect, which is called decalaje in Terpel in Colombia ] , and that explains most of the drop in margins at Terpel, actually.
Together with that and also Terpel, we're seeing higher distribution costs, which had to do with the incorporation of the newly acquired assets of ExxonMobil as we will see further on.
And finally some increased SG&A at Copec, which is basically depreciation. Together with that, we are recording lower EBITDA in Mapco. Mapco goes down from a very high $13 million EBITDA we recorded last year to $9 million this year. That is a very high comparison base because of the effects of the hurricanes last year.
In terms of nonoperating income, the most important factor here, by far, are financial expenses which have gone up because of increased debt at Terpel related to the acquisition of the ExxonMobil assets. Part of this debt should be paid down once we receive the profits coming from the sale of the [ fuels ] assets of ExxonMobil.
EBITDA goes down in local Chilean currency from COP 105,000 million to COP 100,000 million. This is all, obviously, presented in local currency, [ which is a function of currency of this division. ]
On Page 20, we can see the market share standing at 56.1%, and the market share evolution at 57%, slightly down with respect to last year. It has to do as we have commented in previous occasions, has to do with loss of some industrial clients. This should be gradually reverted as of November this year, when we will start selling to BHP. As we announced before, we have won the bid for a contract with BHP a couple of months ago. And we will start sourcing and providing fuels to BHP as of November this year. So this should influence our market share going forward.
In terms of volumes, volumes was slightly down, once again because of the industrial channel. Some major clients that we have lost is going to be [ reverted, ] once again, by BHP. And in terms of gas stations, volumes are flat with respect to last year, which might have to do essentially with the high level of prices that we are seeing in fuels.
Regarding the outlook. Going forward, as always, we should expect stability in margins in Chile other than the effects caused by inventories. So FIFO effect, as we always comment, FIFO effect lends some volatility to our margins. Together with that margins, will always be affected by the amount by the volumes of fuels that we are able to import from one quarter to another. So that may bring about some complications as well. Other than that, we are expecting stable margins in Chile going forward. We are seeing a very good positioning of our network and [ our band ] . So a very robust positions in gas stations.
Terpel will be commented on the next slide. And Mapco, [ a Greek word Mapco ] , as I said before, EBITDA has dropped from $13 million to $9 million this quarter. EBITDA last year was influenced by very high margins as a result of the hurricanes that hit the area at that time. This year, we have seen a very strong growth in volumes, actually the accumulated growth in volumes is double digit. And in this quarter, in particular, we have -- we're still growing 4.4% compared to a flat margin, basically -- to a flat market, basically. So now that volumes are up, we are focusing -- going forward, we are focusing on stabilizing margins and also in operational efficiencies. So bringing down costs as much as possible. And finally, another focus of our attention will be improving product mix at convenience stores. So Mapco, in general, with mixed news. Very good volumes. Margins, a little low, but they appear to be higher in October and November. And going forward, focusing on efficiency and also in improving mix.
Regarding Terpel, which we are showing on Page 21. EBITDA is down. This is presented in local Colombian currency, so Colombian pesos here. So EBITDA is down from COP 214,000 million to COP 206,000 million. So EBITDA is down and that has to do basically with a negative FIFO effect in Colombia in this particular quarter. Other than that, still news are generally very good. We are seeing rising volumes. We are seeing volumes going up by 5.5% in Colombia, and this is heavily influenced by a very good performance of our gas stations channel. Actually gas stations are growing more than 6%. And in particular, our company-operated gas stations are growing at double digits. So very good news from the growth of gas station channel. On the left-hand side bottom corner, there you can see growth in our different markets for Terpel. Ecuador and Peru, of course, are influenced by the fact that they have started recording volumes coming from ExxonMobil. So the percentage growth rates there are very, very significant. Colombia, as I mentioned, very healthy growth. Panama heavily influenced by, as always, by the sales to the power generation sector, which have been lower in this particular quarter. And the Dominican Republic influenced by some airlines that have stopped operations in the airports in which we supply fuels.
In terms of natural gas for vehicles, which is shown on the right-hand side there, we continue to see a negative trend in Colombia, although at lower rates -- going down, but at lower rates than before. So stabilizing a bit. In Mexico, we are out of that business. So volumes are not existing there. And in Peru, we are seeing a positive trend in NGV. And finally, we have including -- we have included a table there, which is showing the EBITDA coming from the newly acquired operations of ExxonMobil. If you go to the bottom line there, you will see the volumes increasing a bit in this third quarter with respect to second quarter; and the EBITDA quite stable with respect to the second quarter, standing at approximately $7 million per quarter.
This was in Colombian pesos, and the figures are equivalent to approximately $7 million per quarter. You can see that Colombia started -- we started incorporating the effect of the assets in Colombia in this particular quarter, in the third quarter of 2018. These figures are not representative though of the long-term contribution of EBITDA coming from the ExxonMobil assets. We are still subject to several startup and adjustment costs, which will not be repeated in the future. We continue to expect an estimate of the total contribution coming from -- the ExxonMobil assets will be around $70 million per year. So far we have recorded $7 million per quarter. As I said, this is not representative yet of the long-term figure that we are expecting.
Moving to Page 22. We are showing Abastible, our LPG division here. We have recorded a lower net income both because of operating and nonoperating factors. In terms of operating factors, we basically have seen an increasing trend or an upward trend in SG&A in Chile and also in other countries. This is driven to a very large extent by regulatory requirements. So safety and security and regulatory requirements, in general, have driven up SG&A. Volumes, though, have behaved quite well, stable in Chile and increasing in Colombia, Peru and Ecuador. In terms of nonoperating income, we are basically hit by a loss in monetary, net monetary, position because of the rise -- the effect of inflation on the debt held by Abastible. Finally, higher taxes related to the functional currency in which we have recorded our investments in other countries and the evolution of that currency.
Operationally speaking, we are showing some data on Page 23. We are seeing volumes increasing slightly in Chile, 0.1%. This is composed of [ a bottle channel ] that was up by 1.4%, which is in line with its historical behavior, offset by an industrial channel that has gone down by 3%, which relates to loss of some large clients. As you know, this is a very competitive market, and of course, clients in the industrial channel come and go pretty much like in the fuels -- in the liquid fuels division.
In Colombia, we are seeing volumes going up, 1.3%. In Peru, this is a 17% figure of increasing volumes, but this is highly influenced by a very strong performance of the wholesale channel. What we're doing here, pretty much like we do in Chile, is importing volumes of propane from abroad and distributing them within the Peruvian market. So that explains the 17% figure. Other than that though, all channels have -- are stable and even growing a bit, which is very good news. We have volumes already controlled in Peru. They have been dropping for a while. They are already controlled, and now we have to work in increasing margins. In Ecuador, volumes continue to rise. They are actually increasing by 6.4% in this quarter.
In terms of the outlook. In Chile, we see a bottled market, which has grown in line with its historical growth, which is now fueled basically by housing growth, commercial activity and also some effect of population increase because of immigration. In Colombia, we are seeing a good behavior of volumes and margins, offset to some extent, though, as I mentioned before, by SG&A, which is related to some regulatory requirements. In Peru, we are controlling volumes. We are seeing volume growth already. We are going ahead with some commercial strategies that have helped to stabilize and grow volumes, such as a second brand that we are optimizing. We have faced a scenario in this last 2 years, a scenario of very high propane prices, which has affected margins, but we are seeing that reverted -- that is reverting in the last couple of months. So propane is gradually going down. This should be very good news for margins. So this should allow us some room to increase margins, and this should also be good news in terms of controlling [ informality ] a little bit. So the 2 very important factors that are affecting Peru, informality and propane prices. It should bring somewhat better news going forward in the next 2 months.
And finally, Ecuador, as I mentioned before, it has been [ permanently ] gaining market share. So very good performance of our subsidiary company, Duragas, there.
Moving on to Page 24. We are showing Sonacol here. Sonacol is our pipeline division. Pipeline usually grows pretty much in line with the fuel sector. And it's dependent on the fuels volumes transported by the pulp pipelines. In this case, we are seeing an increasing operating income, even though volumes have decreased a bit, decreased by 5.8% with respect to the second quarter to third quarter last year because of less imported volumes. As I mentioned before, we have had less [ portages ] to import in this quarter, and that also influences volumes transported by Sonacol.
On Page 26. We're taking a look at our other subsidiaries very briefly. Igemar, which is our fishing, division shows a lower net income. This has to do, as we already mentioned, by a one-off effect in the third quarter last year related to the sale of our associated companies Selecta in Brazil. Corpesca is also affected by that same onetime net income recorded last year. Other than that, the fishing activity has been better this year with higher volumes, and in general, higher prices as well.
Laguna Blanca, very stable with respect to last year; and finally, our natural gas-related companies, which are Metrogas and AGESA, also show stability with respect to last year, influenced to a certain extent by these -- by the increase in the exchange rate or the depreciation of local currency that we have already come to the point.
That's it for the numbers. Let me walk you through a couple of developments and highlights that we have representing here over the next 3 pages. First of all, we are making progress with the MAPA project in October, and Arauco signed the main contracts with 2 providers of equipment for pulp mills. These are probably the largest providers of equipment, Andritz and Valmet. This are contracts that add up to approximately EUR 60 million (sic) [ EUR 600 million ]. Valmet will take care of the recovery broiler, the power broilers, the dryer and the bale handler. Whereas, Andritz will be supplying the wood preparation equipment, the digestors, the fiber line, the evaporators and the recausticing and lime kiln.
Together with this, we have made progress in the process of financing MAPA. In this regard, Arauco has placed 2 bond issuances in the local market, adding up to approximately $340 million, which is actually the largest local issuance of the year in Chile.
The first bond, which has a tenure of 10 years, was issued at a rate of 2.38%. This is in local U.S. currency. So inflation-adjusted currency. The second one has a tenure of 25 years and ended up at 2.88%. So very good rates for this very important financing linked to MAPA.
In our other projects, we're also making progress in Grayling. Grayling is very close to completion. We had 93% progress. We're expecting operations to begin by the end of this year. Just to remind you, this mill -- this is a panel mill that has a capacity of 800,000 cubic meters per year. CapEx is a little bit up, where final figure for CapEx is $450 million. In relation to the Valdivia project, also on Page 29, we are up to 48% completion. We continue to estimate the total CapEx at $185 million. This will take a total construction period of 2 years, and we are expecting the ramp-up during late 2019.
And finally, some late developments in our acquisition of the ExxonMobil assets. We're representing the whole story there. Just to remind you, this is an acquisition that we closed at the beginning of this year. In March this year, we closed the acquisition. We were subject to 2 requirements by the government authority. One was to sell one of our existing lubricants plants. The other one was to sell the Colombian fuels assets coming from ExxonMobil. We are already done with the first requirement, which was selling one of our lubricant plants. So actually that took place in July. What we did there was we repurchased the lubricant business from the blind trust or the autonomous trust that is managing the assets in the meantime. So we repurchased the lubricants business from this trust. And at the same time, in part payment, we sold [ them ] one of our plants. We purchased the Cartagena plant, and we sold the Bucaramanga plant. So we are going to be -- going forward, we are going to be producing all of our brands at the Cartagena plant. This has implied that we have had to go through a ramping up process and adjustment process with some start-up costs at the Cartagena plant, and that has, of course, hurt EBITDA generation in Colombia related to the ExxonMobil assets in this particular quarter. So going forward, we will be producing only in the Cartagena plant, and actually, we have restarted operations there in August this year. In the meantime, the autonomous trust will continue to operate both the Bucaramanga plant and also the fuels assets of ExxonMobil in Colombia with the mandate of selling all of those assets to a third-party as required by the authorities. The deadline for the fuels asset is December this year. So we have -- we should have some news on that regard pretty soon.
With that, I am reaching the end of the presentation. So let me open the floor for questions. If you have any questions, we will be happy to help you. Thank you.
[Operator Instructions] And our first question comes from George Staphos with Bank of America.
Rodrigo, my questions were around the fuels business. I guess, if possible, and to the extent possible, could you quantify the EBITDA negative effect from the loss of share in industrial, the inventory effect, the decalaje, and also the effect from higher distribution cost associated with ExxonMobil and Terpel? That's question number one. Relatedly, what benefit on the cost line can we expect in fiscal -- in calendar fourth quarter or in upcoming quarters in 2019, as you integrate the businesses? And then lastly, with oil prices declining as rapidly as they have, I imagine that would be a negative for inventory effects on earnings. But if you could relate what else we should be, at least, considering in our modeling that would be helpful?
Thank you, George. Let me -- regarding the first question, the relative impact of each of the drivers we described, let me tell you that if you compare the EBITDA of Copec with last quarter, the drop is approximately $20 million. Of that drop, and these are very rough figures, but of that drop, approximately half of that has to do with the foreign exchange differences. So the effect of converting the local currency figures coming from our first division into dollars are approximately half of that. And then the decalaje effect in Colombia, which you can explicitly see in Terpel's press release is approximately $7 million. And the rest is made up of FIFO effect in Chile and this import margin that we record every now and then in Chile as well. So half of it of the $20 million that EBITDA has gone down. Probably it has to do with foreign exchange. And the other half is split between decalaje effect and also the importing margin. The -- in relation to the integration of businesses going forward, the main effect that we expect to see here is that coming from ExxonMobil. As we have commented before, the ExxonMobil business has a strong synergy with our existing businesses in Colombia, Peru and Ecuador. There are lots of benefits from integrating the 2 businesses, having to do with synergies in costs, having to do with synergies in sales as well, a lot of cross-selling, for example. And as we have said before, the figure that we estimate, that will be generated, the total incremental figure that we estimate will be generated by the acquired assets, is close to $70 million per year. Even though we've seen quarterly figures that are below that -- those $70 million in the quarters so far, that relates basically to some startup costs and some logistical issues that we faced. But going forward, we continue to estimate $70 million of the total incremental EBITDA coming from the integration of ExxonMobil. And finally, regarding the behavior of fuels prices. Yes, of course, we expect to record negative FIFO effect in Chile and in Colombia. Not in Mapco. Remember, the Mapco does not hold a lot of inventories because it’s only the downstream part of the business. It doesn't has any logistic or wholesale part of the business. But in Chile and Colombia, we should expect a negative FIFO effect for the coming months. It is hard to quantify as of now, but of course, we will be commenting on that when we report our final quarter. This should be offset to a certain extent by the fact that lower prices, in general, mean increased volumes. As we have commented before, we are always seeing -- given this high level of prices, we're [ already ] seeing some drop in the rate of increase of volumes in gas stations in Chile, and that might be related to the high levels of prices. So in that regard, a falling price of oil could bring some good news in terms of demand for gas line in our gas stations. That would be the 2 effects that we expect.
Okay. Rodrigo, just quickly, the impact from ExxonMobil. We should visibly see it. We should see a meaningful pickup in the upcoming quarter. I recognize what the incremental is that you're targeting, but in terms of near-term trend, we should see a pickup, a visible one, starting in fourth quarter. Is that correct?
Not the total, not the total EBITDA probably, but yes, we will see -- we should see an improvement with respect to the figures that we have already recorded.
[Operator Instructions] And this concludes our question-and-answer session. I would like to turn the call back over to Rodrigo Huidobro for any closing remarks.
Okay. Thank you very much for your attention today. We expect to be reporting the fourth quarter this year around the first few days of March. So we expect to meet you back [ again. ] Thank you very much. Bye-bye.