Warehouses de Pauw NV
XBRU:WDP
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Warehouses de Pauw NV
Earnings Call Analysis
Q1-2024 Analysis
Warehouses de Pauw NV
The management expressed confidence in the company's future, highlighting the addition of €200 million in direct income-generating assets, pushing the portfolio to €7 billion. Furthermore, they emphasized an EPS growth forecast to 1.47 for 2024. The company saw an uplift in portfolio value by €25 million after five quarters of stagnation, driven by €200 million in new investments. This confidence is built on solid structural demand drivers and sound market dynamics, even in a normalized demand scenario.
WDP has a significant investment pipeline amounting to €500 million, including developments, acquisitions, and energy investments. The company is actively negotiating with clients for new developments, despite the economic downturn causing delays. In France, WDP successfully invested €75 million, bringing the total portfolio to €250 million, indicating an open and growing market. Conversely, the German market remains expensive and less active due to high cost expectations.
The company achieved a positive rent reversion of 15% across 100,000 square meters of its existing portfolio and indexed leases by over 3%, showcasing an ability to extract significant value. Despite these hikes, the portfolio still operates below market rents, indicating a strong reversionary potential of 13%. With almost 2 million square meters of development potential, the balance sheet remains robust, supported by a low loan-to-value ratio of 34% and net debt to EBITDA of 6.6.
WDP is managing its finances with prudence, having signed a hedging agreement in early 2022 that benefits from low-interest rates, keeping the cost of debt at 1.7% in Q1 but expected to remain below 2% for the year. They also engaged in a €300 million term loan package with IFC at a competitive spread, despite the high pricing environment last year.
The company's pre-leasing ratio was flat at around 70% due to specific project requirements rather than a strategy shift. Management anticipates gradual leasing progress towards completion. The slight year-over-year decline in the operating margin to 89% was attributed to a positive one-off G&A expense last year and property tax adjustments under IFRIC 21.
The market dynamics vary across Europe. France shows a reopening with sellers accepting a 5% cash cost of capital, resulting in more transactions coming to market. Germany, however, remains challenging with sellers holding onto a 4.5% valuation threshold, leading to market stagnation. WDP is strategically growing its presence in France and Germany, aiming for profitable expansion with local teams by 2027.
WDP is committed to developing high-value logistics projects, including art, pharma, and tech logistics. They emphasized the economic viability of their development projects through strategic land acquisitions and gradual payment plans, using innovative ideas to maximize value creation. The recent complex brownfield redevelopment in Belgium is a testament to their ability to negotiate and execute high-potential projects.
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Good morning, everybody. Good morning from [indiscernible]. I think I can start with the headline of our new annual results book of '23 confidence in what lies ahead. And I would say, very confident and what lies ahead. And I think we can say that it is proven by our results. .
You can see, I mean, we are able to add EUR 200 million direct income-generating assets into our balance sheet and let the portfolio grow to the round figure of EUR 7 billion. Besides this, we still have a very nice investment pipeline of EUR 500 million and the combination of developments, acquisitions, energy investments, so a very nice further deployment of our capital, and all of this is indeed based on a unique balance sheet with loan-to-value of 34% and more important net debt to EBITDA of 6.6.
And with all of this, we can confirm our EPS growth for '24 growing up to 1.47. And I think very important in this stage and for the first time since 5 quarters, we see an uplift in our portfolio value of EUR 25 million, EUR 25 million on the EUR 200 million extra new investments. So I think -- and I see spring in the air, I see spring in our results even when outside spring is not there yet.
And we blended well. I think we can say that Blend 27 is well received internally, externally. I think we started the year with a very clear new plan building further on our strong fundamentals and not only the strong fundaments of WDP, but very important, it is based on build and disciplined build on indeed very strong and good structural demand drivers and sound market dynamics.
Yes, there is still good demand. It's normalized. And let's say, we have to work again when building becomes free, but we are used to work for it, and that's our main and basic knowledge. So we know to do that. And besides this, we see indeed further very nice negotiations with our clients, all our land bank to, let's say, to do further new developments, but indeed in this time of an economic downturn, it takes a little bit longer, but we can -- we still see a lot of very positive negotiations within our different teams and different regions.
And like I said, we could load our balance sheet, our EUR 200 million direct-yielding assets at an average yield of 9% besides the EUR 500 million investment pipeline that is running and above all this we have almost 2 million square meters of development potential within the balance sheet.
But even there, I think the most important is that we planted our flag again in France and by, let's say, finalizing and realizing the investment of EUR 75 million that we announced in the ABB, we could let the portfolio growth towards EUR 250 million again, so I think this proves also to the market, to the brokers, to our colleagues that we are, let's say, active again. And we feel that in France, the market is open and that we can grow.
We see, again, possibilities. While on the contrary, for the moment, Germany is still too expensive. There, let's say, a lot of people are still thinking below the cost -- the cash cost of capital.
And then also very important, we could extract value out of the existing portfolio with an indexation of the leases by more than 3%, and we could get a positive rent reversion for 100,000 square meters of 15% in the existing portfolio. And even after an indexation of 3% and 15% higher rents in a small part of the portfolio, we still stay far below market rents and the reversionary potential is still 13%.
In the meantime, of course, permanently, we stay neutralizing, and we keep on investing in our PV capacity and further on in our energy infrastructure. All of this based on the balance sheet, like I said, and important is there that we still have almost EUR 2 billion of free credit lines, so we have the capability to grow further as we have the money to realize our blend program and we could already use and, let's say, directly invest more than 50% of the ABB of last December.
So let's say, we could let the work and the money work for us. So I think this is indeed a perfect start of the year. Yes, Q1, it is only the start. A lot of things are in a start-up mode, but I think it's a perfect start of the year. And to show a little bit how we can create value and before answering all your questions, I would like to give some color on a very nice projects and using it -- using this example of the way how WDP creates value.
After 2 years of negotiation with the seller, local authorities, public authorities, we could finalize this deal [indiscernible] for the Belgium online, let's say, is the famous -- Chinese is the place of the famous Chinese trade park of Mr. [indiscernible] more than 10 years ago.
And it is old ideas and it is an old brownfield and not used piece of land for more than 30 years. But it was a very complex soil remediation, a soil remediation, which is 80 million and which will take 1.5 years, but if you calculate, you will see that the soil remediation at the cost of more is more than the land value.
So we have to find solutions, and therefore, we could also add some extra investments to the portfolio, but important is that by the end of '25, we will be ready for a new unique development and the hotspot of logistics in Belgium, Wellebrook along the logistic highway the A12 in the middle of the big cities [indiscernible] Brussels, [indiscernible].
And we even launched on late a request for innovative ideas to get all the ideas out of the market to create unique projects. And in the meantime, let's say, by taking over this difficult brownfield redevelopment, we could also add 3 small units to our portfolio, but very nice ones [indiscernible] 3x high-value logistics: one, art logistics, top class art logistics, pharma logistics and tech logistics. So really high-value logistics at the right place, generating direct income and another advantage of brownfield developments is that you don't have to pay the land directly, let's say, you can pay the land step by step during the remediation.
So let's say, a very nice complex deals, value creation, I would say, development projects with brains for the future. So this is one of those little examples on where we try to create value every day with our different teams and the different countries.
But [indiscernible] and let's say, let's go to the questions.
[Operator Instructions] We already have the first question coming in from Frederic from Kepler.
I appreciate the new deal you just presented, which looks very exciting for you. I'm just curious, if I look at the Q1 in terms of new projects that you found in Q1, you had EUR 10 million in Romania. To me, from a historical point of view, it looks relatively limited. How do you see that evolving through the quarters?
Well, I think I answered that, let's say, indirectly, Frederic. Yes, indeed, it is only EUR 10 million in Q1, but I think that is also normal. Q1 is always the start, let's say, people starting to negotiate, to discuss with us about new projects, but most of them, let's say, the 2 most important finalizing moments are before summer and before the year-end. .
And there, Q1 and Q3 are always the most -- let's say, the moment when we work the heart but when you don't see the results yet. But I can say that there are -- indeed, that we are in the different platforms, negotiating different very nice project. And I would not say less than last year on the contrary.
Okay. Maybe a second one. You mentioned that you have to do more work when [indiscernible] to attract [indiscernible] versus maybe 2 years ago, 1 year ago. Can you describe a bit what you do? And is it true higher rental incentives? Or how can we read that?
No, it's not, let's say, but at a certain moment, 1 year, 1.5 years ago, let's say, even when a building became free, you knew there was -- and somebody call directly even before it was empty. And now, let's say, we have to put it on the website again to speak with the brokers to do the normal job, but it's not -- let's say, you can still rent it at the new rental levels at the rental levels we wanted. And it's not that we have to give more rental incentives. No, it is just, yes, you need to communicate that you have a possibility...
There's a normal work of letting a building in [indiscernible] in a market characterized by scarcity [indiscernible] prices, but the last couple of years, it was also crazy because the building was already left before it became empty and there was no friction of vacancy. Now it's just the normal letting process in a scarce market.
But without price discussion and without any negative price discussion.
All right. And then last 1 for me. I see you signed a EUR 300 million package with IFC. Can you comment on the level of spread of the loan?
Yes. So it's deal with IFC to deploy to Romania and it is -- so it's a term loan, which we will gradually take over the next 18 months, and it comes at a spread over the arrival just below 150 basis points, but I need to add that this is the pricing level for the big ticket mid last year when prices were still higher and it's a big ticket with and it took some time to close, which is normal for this kind of procedures. If we would do it now, it would be 25 bps lower.
Okay. You said 100 bps, right?
100 -- just the margin, the credit spread is just below 150 bps. But if it were today, it would be 25 basis points lower. It was just at the price of mid last year.
The next question from Wim Lewi, KBC Securities.
Yes. I've got 2 questions. One is also going further into the Wellebrook brownfield, very interesting. You explained that the cost remediation was even more than the land value. Can you just explain a little bit what the issue exactly was with us? I'm not that familiar with the A12?
Well, a fully analyzing the the soil and together with a very specialized but internationally known soil remediation company. They may also quoted the dredging group, we came out at a proven by over soil remediation of EUR 18 million. And if you then divide EUR 18 million by 50,000 square meters, you come up EUR 360 per square meter, which is more than land value. So the seller had to compensate it by adding those very -- small but very interesting value-added and high-value logistics buildings in order get to a neutral result.
And just to add because you mentioned, I'm not familiar with the A12, it is just on that side there is a problem with that site. just that site on which there is a pollutive material, and it need to be removed. We made the assessment and we deducted it in full from the price of the other buildings we acquired them.
So we will just, in the end, for us, it will be economically after the soil remediation, it will be economically as if we buy the land at market value and we full soil remediation of the overall price of the transaction and it is covered by -- backed by specialists in soil remediation.
So for example, we got this all for free, but now we have to invest in the soil remediation.
Okay. And you referred to [indiscernible] is the Flemish government involved at all in this project?
No, no, no. It was 10 years ago from those with a good memory. 10 years ago, [indiscernible] announced a big new Chinese trademark on that piece of land, but nobody ever realized it and nobody -- because nobody could overcome the soil remediation. And we did and we realized in a [indiscernible] community, the seller and we and [indiscernible].
[indiscernible] as a guaranteed. Okay. So that's all clear. Okay, my second question was on the cost of debt. You explained in your results that the proactive hedging pushed down the debt -- cost of debt to 1.7 from 1.9. Is there more potential for that? Or is that kind of that potential used to now?
Yes. It's -- we didn't sign any new hedges. This is based on the hedges we signed predominantly in early '22. In early '22, we signed EUR 1 billion of hedges, that's almost 0%, and we still benefit from that. It's also a bit of a technical effect because we are slightly overhedged today after the ABB and because [indiscernible] technically, you reduce the amount of debt and save our your interest cost on the variable interest rate loans and the benefits of the hedges, which are in the money is still there. That's why technically, the cost of debt came down a bit Q-on-Q with 20 bps to 1.7%. For the remainder of the year, it will increase a bit as [indiscernible] draw again on the floating rate [indiscernible] facilities, but it will still be this year below 2%.
Right. And is it then pro rata, as you spend like 2/3 of the capital increase that 2/3 of the hedge overheads has been used up. Is that a fair assumption?
Yes, I look at more -- we look at more at a global level and the hedge ratio came down from 120% to 112%. And by summer, it should also further decline and by the end of the year should revert back 100%.
[indiscernible]
[indiscernible] from Bernstein. Just a couple of remaining questions from my side. I noticed you've mentioned a few times about negotiating leasing and the development pipeline. I noticed that it was the pre-letting progress was pretty flat in the period, hovering around the 70% level. Any comments you can provide on how quickly we could expect this to advance over the coming quarters and the negotiations you're having?
And then secondly, just on your operating margin, I noticed that ticked down year-over-year. Again, any comments I can provide and what you expect in terms of trends throughout the year?
Yes. So the pre-leasing ratio of 17% was indeed not that we changed our strategy to start developments unless, but it was due -- like we said in the year results, it was due to some specific reasons in [indiscernible] and could get the project, but it was with a promise also there to do the soil remediation and to realize that brownfield development and then the promise was there that we had to start also with the development.
The other one was in [indiscernible] and so it's not a change of strategy, it's a little bit more specific due to specificalities of some projects.
But we are confident that [indiscernible] by completion.
And then the second question on the operating margin, which is indeed down year-on-year to 89%, but that has a specific reason because in last year, there was a one-off of EUR 2 million in the G&A expenses. A positive one-off, and that's So that's why year-on-year, the margin has dropped.
And also now that because of the fact that we need to reflect as a result of IFRIC 21, all the property taxes, which are net at the charge of WDP, we need to reflect that in our results that Q1 is always the quarter with the lowest operating margin, and it was perfectly in line return the budgets with our return on budgets for which the full year budget is in our annual report and the full year budget has an operating margin target of just over 90%. So it's in tune with that year figures.
Very clear. Just on the pre-letting, I take your point on the specific reasons, but should we expect this to continue to tick up over the year but probably remain a bit below prior levels because of these specific reasons?
Yes, yes, yes. It will gradually be leased up towards completion, exactly. And in the meantime, when we add projects, they should normally be preleased conformer strategy.
Question from Inna from Banque Degroof Petercam.
Two questions from my side, just to come back on [indiscernible] question on the operating margin. the main increase from what I see is related to the G&A expenses. Is it fair to assume that the one-off was related to that specifically, the one-off from last year?
Yes, yes, it was in the G&A expenses, plus EUR 2 million was a one-off in the G&A expenses of last year.
Okay. And the target margin for 90% that is communicated for 2024, should we assume that this is something that you will be targeting also going forward?
Yes, absolutely. Yes, we strive to copy the profitability of our existing business model as we go further and expense, and that is an operating margin of at least 90%. Yes, that's our assumption.
Okay. That's clear. And then just a last question on the market because we started to see quite an uptick in terms of transactions, certainly in France. And I think some of your peers have commented that they're seeing quite a few more potential acquisitions opportunities. Could you perhaps comment on how you experience this and also if there are any particular markets that really stand out?
Well, like I said, Inna, I think, yes, we see a reopening of the French market. I think people accept the new cash cost of capital being at least 5%. And there, you see step-by-step new files coming to the market. While on the contrary, in German, it's still difficult to accept that the cash cost of capital is 5%.
And I think -- or I would say, the German market is still more frozen by NAV and the fact that they are still at 4.5 in their valuation, they don't want to move because if they do something, it would change their NAV, and that is still at 4.5, so that market is still frozen.
Okay. That's clear. And is there any particular background in terms of sellers that are looking or are placing the assets on the market?
No. They are different from small to big ones. People who waited, of course, the last 2 years...
[indiscernible] with rotation not so, let's say that if you would look at the stress or whether [indiscernible] rotation in France, people who have waited to sell and need to sell it because they have a mandate in the [indiscernible] for example, a [indiscernible] or some optimization in there.
But it's not 1 sector or 1 niche specifically, no.
But there is more liquidity in the market and more things opening up gradually in France.
[indiscernible]
Besides France, you mentioned that Germany is a bit more closed. But we see peers acquiring land in brownfield sites in Germany. So apparently, they disagree with you that Germany is [indiscernible] too expensive. Do you have any idea why this is different, why you see this different than peers? Or could you comment on the availability of land and land prices between France and Germany?
It's a difference, what I meant, Stephen, was on acquisitions. But I said was on the acquisition side. You say it's about land and brownfields redevelopment. There, indeed, we have seen some transactions of our colleagues who are deeper in the market and who are deeper in those markets and now like we can realize here in Belgium, those kind of deals, they were able to do that. They have bigger teams than we have in Germany.
So there's a difference between land and acquisitions. And the difference between land price, I think that Germany is very -- has very high land prices. Depending on the regions, it's also, of course, very the difference between, let's say, Eastern Germany or [indiscernible] versus Munich, and that's totally different, that are different worlds. It's a big country. In France, land values, except around Paris, are still lower versus, let's say, the Benelux and Germany. There you still have a land stays cheaper. But even like cheaper, it's difficult to find.
Okay, clear. Are you expecting to increase your presence then in Germany just maybe invest more to build teams there or is that not in the plans?
Here, we really have the intention to build out France and Germany by '27, we want to have 2 very nice portfolios with 2 teams -- with 2 local teams and extra so that we can grow from 3 platforms to 5 platforms by '27.
That's one of the main goals of Blend 27. Important, Stephen, that we want to do it profitable. We want to grow, we like to grow, but we want to do it profitable so that -- and of course, depending on how strategic it is we can do something extra. But at the end, we want to grow from 3 platforms to 5 platforms in a profitable way.
Yes. Okay. That is fairly clear. Then my final question more broadly on the markets. So could you comment on the Dutch, Belgium and Romanian markets, what vacancy levels are? And how speculative developments are going, if they decrease or not?
Stephen, so in general, when you compare what's in European markets [indiscernible] probably the same when you're looking at Belgium or Netherlands we're looking at vacancy rates at below 3%. And on micro markets, even lower, for example, in the [indiscernible]
In Romania when you're looking at vacancy ratios, you're at a sub-5 level, which is historically one of the strongest markets over there. Even in the [indiscernible] region, you're at 4.5%. And we're typically the peer are developing more on a speculative basis.
When you're looking at new speculative supply coming on the market, it's actually quite limited to around 10% to 15% of annual data and supply has actually come down and has been pre-let approximately 70% to 80%. So the risk on any supply overhang in the short term is relatively [indiscernible].
And then we have another question from [indiscernible] from Barclays.
Just looking at your acquisitions during Q1, I see a very profitable kind of 6.6% gross yields. When you compare it with your pipeline -- development pipeline yield and also the fact that pre-let is kind of flat. How would you still kind of balance your property additions still more towards development? Or would you take a difference stance today?
No, it's a function of the opportunities. We have always historically been -- we are opportunistic in there in what is profitable. So in some cycles, you can -- you need to develop more other times. In other times, you can again acquire more. Now in the recent years, we were full fledge developers because the market was too expensive.
Now we live in a different world, and we think we can acquire more. It's just in function of the opportunity, it's function of the specific location assets and if it's an good addition, the portfolio and whether it's profitable. The bulk of our investment plans Blend 27, it's still the bulk of the CapEx is still built on the new pre-let development projects.
And then supplemented by selective acquisitions. And we have never been there the market makers. But if we can do some interesting off-market deals or buy out the neighbors on some locations, then we can do it, and we have the money to grow further and to capture and snap up some deals.
Frederic, you have a follow-up question?
Yes. I just wanted to rebound on your comment, yours on Germany where you said that yield would be a bit considered too low today at 4.5% and it move up to -- for you to really be considered as attractive. But then how can we interpret your net initial yield of 4.3% in your portfolio for Germany?
This 4.3% yield in our German portfolio needs to go up. That's for sure. Sorry, but yes, it's ridiculous that yields on [indiscernible] is just based on the value rates and they themselves base themselves on no transactions on the historical transactions, there has been almost no liquidity in the German market because it is penalized by the NAV dilemma.
If they sell as a higher than they need to more on their assets. We have already done that for the bulk of our portfolio. Germany is only small but it will go up and converge to the rest of Europe, we don't see a reason why that should be materially different.
That's why I say that, and I think it's proven also in our balance sheet that Germany is frozen by NAV.
Yes. And specifically, also, you have in -- for our portfolio in Germany, there is also 1 important comment is that it is also substantially underwrite it too...
Yes, substantially underwrite it.
Substantially underwrite as well. But in any case, it will go up.
Okay. So the reversionary yield is actually much higher than...
Yes, yes, yes.
Okay. But then I appreciate that Germany is very small, but can we say that for the rest of the country that appraiser are now in line with the market or...
Yes, absolutely.
And in Germany, it's in line with all the valuations is just our humble opinion that it should increase because -- we see the market as blocked as a result of it, but it is based on the valuators in each country, but...
And there are files today, Frederic where people say, if we don't have or we don't get a 4.5% net initial yield, we don't sell because this is our valuation is up 4.5%. It is what it is.
[indiscernible]
Another question on that valuation. So [indiscernible] yesterday said that we have reached the bottom and that there is a turning point nearing. What can you say that -- about that, apart from Germany, of course?
We follow that reasoning, absolutely. We see it also in our in our results, let's say, the bulk of our Western European portfolio is valued at a net initial yield of 5%, which will also automatically already expand over the next 12 months by around 20, 25 bps because of the reversion in the indexation, and that's perfectly in line with the market based on also the fact that we have a reversionary yield over 6%.
That's why I said spring was in our valuation.
Yes. And for the first time, you have now seen since Q4 '22, the underlying values of the existing portfolio has been flat in Q1.
All right. And there was no specific talk about renting or lease contract in the region of Liege at EUR 80 per square meter. It was not signed yet, but what can you say is that 80, will that become the new normal? Or is that a wet dream of some people?
[indiscernible] is a specific region. And [indiscernible] will never be a normal market. And let's say, it's never -- it will never be the example for the rest of the market. And of course, we cannot speak about what is going on in the market, if it's not signed, but be honest -- let us be honest, 80 is not the new normal in Belgium.
Okay. Then a small remark, I would like to thank you for the extended reporting here on Q1. So foreign competitors are reporting less. So maybe you should also do that in order to further improve your margin.
And then we have a follow-up or another question coming from [indiscernible].
Just a quick question on the -- I think the general market consensus might be 4% versus 5%. I think sellers want to set up 4% but buys on by 4%. So I just wanted to sell a 5% and how you're seeing that kind of yield transactions generally and how you're seeing that play out in your interactions with buyers and sellers?
Yes, here we said in Germany, it's difficult to make a deal. There are also less deals in Germany because -- and in France, it's more opening up and you have seen...
I think indeed in France, the market is now -- let's say, in France, also brokers accept the fact thus the cash cost of capital is 5 and doing developments at 7. So that depending on the location, the quality, the reversionary potential that the acquisition market needs to be between 5% and 7%. And that is also what brokers are advising to their clients and their -- that range is accepted.
While in Germany, also the brokers, a lot of the broker stay No, we don't want to see and we don't accept offers starting with the 5 because our market in Germany is still below 5. And so -- and then the seller of say, "Yes, our NAV is at 4.5, if you don't offer 4.5%, we don't sell." And so we see portfolios that are already more than 1 year, 2 years on the market, but who are not sold because people still hope mid causes the strategy of the hope that I still hope to get 4.5% and so they wait.
And if you don't have to sell, you can wait. And then yes, sometimes you see a small deal for somebody who absolutely needs to buy. And then you see sometimes for 4.5, 4.77, but that's not a real market. There, the people that, in general, the market does not accept the cash cost of capital of 5.
And I think baseline is the reason why the French market is open is because sellers are cognizant of the fact that any yield should rise with the 5.
And then we have a final question from [indiscernible].
I have a final question on the [indiscernible] of your company. I was reading in your annual report that the Netherlands from 2025 onwards now have established abolishment. And as far as I know, you also have the status in Belgium and France.
And could you maybe shed light on the position in these countries if in the future also can be expected there? Or is not expected?
No, we don't expect any changes there. And of course, the main one is the Belgian REIT regime, which is functioning well and which is a very important segment on the Brussels Stock Exchange, and there are no specific talks or issues [indiscernible] contrary it's performing fairly well and a very good -- considered a very good regime, one of the best ones in Europe in terms of design and success.
I think that [indiscernible] is a bit specific. And it actually is opposite to the trend in Europe, where more and more countries are adapting a REIT regime because they are aware of what it could bring a stable listed REIT regime for the country, for investments in infrastructure for public savings through REITs.
So there, no issues expected to the contrary. And in the Netherlands, there is a bit of a busy situation, and it will indeed be abolished as from '25.
But in the Netherlands, it's not, let's say, the REIT regime, which has been abolished, but it was a broader regime of which the REITs were only a small part of it. So it was [indiscernible].
This concludes so far the Q&A unless anyone has another follow-up question. And in that case, I'd like to hand the word back to Joost.
So thank you for the questions. Thank you for listening. And I would say, yes, spring is coming, and we are confident and we are let's say, looking forward to realize our Blend 27 projects, and we see a lot of possibilities opportunities before us, and we are supported by a very good and liquid balance sheet that we can use in the coming period in order to realize our plans. Thank you, and see you soon.
Thank you.