PNE AG
XETRA:PNE3
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PNE AG
Earnings Call Analysis
Q3-2023 Analysis
PNE AG
PNE AG, in its third-quarter 2023 update, communicated a story of resilience amid various headwinds. The company’s CEO, Markus Lesser, acknowledged numerous external factors weighing on operations, including delays due to transport permit issues and market volatility caused by the Ukraine and Israel conflicts. Despite these, the company's strategic foresight in securing resources like transformer stations and cables, alongside beneficial KfW loans, has enabled them to weather higher costs and interest rates, keeping the adverse impacts to a minimum.
The progress was not just defensive. PNE AG reported a significant expansion in their project pipeline, achieving a new peak of 17.5 gigawatts, marking a 53% increase. Building permits for six new wind farms and successful tenders bolster their standing, with major projects underway in Germany and France. Their wind power generation portfolio rose from 283 to 348 megawatts, balancing the power generation output amid fluctuating power prices and supply.
Financially, PNE AG navigated project delays and ongoing investment in its generation portfolio with persistence. The total output edged up by 3% to EUR 156.9 million, but EBITDA dipped by 22% to EUR 16.5 million due to these delays and a lack of major project sales. Nevertheless, the company maintains optimism for meeting its annual guidance of EUR 30 to 40 million. The cash position, while reduced by EUR 38 million, still reflects a robust liquidity position of EUR 212 million including credit lines.
The journey to amplifying the company's generation portfolio continues, with 649 megawatts either operational, under construction, or in the tendering process, aiming towards a 1,500-megawatt goal by the end of 2027. In just nine months, the company has seen an increase in energy production by 21.7%, resulting in significant carbon emission reductions. Furthermore, the service segment saw substantial growth, managing about 2.8 megawatts, a 27% year-over-year growth.
PNE AG's project pipeline remains robust, with substantial growth in offshore wind, onshore wind, and photovoltaic (PV) pipelines. The company has a clear focus on expanding its reach, with ongoing international projects in Europe and a massive 208-megawatt project sale in Romania. These undertakings, despite project delays, signify an ongoing commitment to development in renewable energy and service sectors. The company pledges a continued increase in workforce and investment in operational capacities, setting the stage for future revenue streams.
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Ladies and gentlemen, welcome and thank you for joining the PNE AG Q3 2023 Results. [Operator Instructions] I would now like to turn the conference over to Markus Lesser, CEO. Please go ahead.
Good morning, everyone, also from my side. Thank you for joining us today in this conference call on the results of the first 9 months in 2023. First of all, I would like to share with you an outline of the presentation and the procedures of today's call. As usual, I will start with an overview of the operational and financial highlights of the first 9 months. After that, I will comment on our financial figures and operational achievements in more detail.I will conclude my presentation with our outlook for the remainder of the year. As always, we will then open the line for the sell-side analysts only. All other participants will stay in listen-only mode as it is our company's procedures for years. As usual, our slides that I will use can be found on our Investor Relations website.Having said this, I would like to draw your attention to Slide 3. In operational terms, we have made good progress. Nonetheless, I want to point out that we are currently dealing with several external factors that slow us down. The whole industry is currently characterized by numerous factors that are leading to delays in projects. For example, delays in transport permits mean that some projects have to be postponed until next year.The Ukraine and Israel wars create uncertainty and keep supply chains volatile. Higher interest rates and further increases in material costs are also putting pressure. In order to counter these current challenges, we have acted with foresight and launched multiple activities to secure price quality.For example, we ordered 11 transformer stations and 700 kilometers of cable months ago, which we are now receiving at a good price and at the right time. We were also able to secure KfW loans of around EUR 400 million at favorable conditions last year. This is helping us at the moment to partially offset the negative effects also had by the higher tariffs. We are in close discussions with our M's, municipalities and politics, and we are pushing very hard to keep those negative effects down to a minimum.In view of these market conditions, we are satisfied with the progress we have achieved in the first 9 months. Despite those difficult market conditions, our project pipeline again achieved another new record high level, reaching 17.5 gigawatts/gigawatt peak. This represents an increase of 53%. We received building permits of 6 wind farms in Germany alone, and we were successful in all tenders in which we participated.We have sold, put into operation and have under construction projects of about 512 megawatt/megawatt peak by the end of September this year. We continued to grow our own wind power generation portfolio from 283 megawatt end of September 2022, to 348 megawatt as of September 30, 2023. Due to this increase in production capacities, we were able to keep power generation output stable year-on-year basis as the increased install base compensated for lower power prices and lower wind supply.Construction activity is high despite the delay. As per end of September, we had projects with a capacity of 215 megawatt under construction. These projects include projects with a capacity of 205 megawatt in Germany and 10.8 megawatt in France. We are especially pleased with the performance of our service segment. It now manages a capacity of about 2.8 megawatt, representing an increase year-over-year of about 27%. That is an impressive performance behind the number. I will come back to the service segment later.Slide 4. Looking at the financials, the 9 month results were impacted by project delays and the ongoing investments in our own generation portfolio and development pipelines. Total output grew by 3% to EUR 156.9 million, which is remarkable considering the hindering factors I just mentioned. EBITDA was down 22% to EUR 16.5 million, mainly due to project delays and the lack of major project sales. However, we are still on track to achieve our full year guidance of EUR 30 million to EUR 40 million, as we expected the strong year-end.Our results were impacted by a muted performance of the power generation segment, which benefited from the higher installed base on the one-hand side. On the other hand, wind yields were damped out and power prices came down over the course of the first 9 months in 2023. Also, our service segment contributed positively to our performance.All-in-all, we are satisfied with our results given all circumstances I mentioned before. Due to the investments in our portfolio and the high construction activity, our cash position came down by circa EUR 38 million compared to the end of last year to EUR 84 million. It is worth to say that our liquidity position, including credit lines, increased to EUR 212 million.On Slide 5, we can see the expansion of our own generation portfolio, which is continuing. We have 649 megawatts in operation under construction or through tender. We are still on the way to increase our own generation target to 1,500 megawatts by end of 2027 under construction or in operation.Just right now, we have -- for the 9 months of '23 we have 348 megawatts of onshore wind project in operation. And further, approximately 209 megawatts in Germany and France will be intended for portfolio are under construction. And if you put this together with the numbers we think we will get at the end of the end, everything is ongoing as planned. We are going to have 626 megawatts in operation or under construction at the end of the year 2027.The hidden reserves accumulated in the portfolio of EUR 185.7 million in total. 421 gigawatts of green energy produced in the 9 month, 2023. This is an increase of 21.7% compared to the last year number. So it was 370,000 tons of CO2 that have been saved with that. The lower results impacted related to lower wind yields. So they are a little bit less than calculated before.We have, on the next Slide a project pipeline of 17.5 gigawatts/gigawatts peak. This is a 53% increase from 11.4 gigawatts/gigawatt peak to 17.5 gigawatts/gigawatt peak. So, where we have an increase in the one offshore pipeline by 1.5 gigawatts, the wind offshore project we added by 2.5 gigawatts, and the PV pipeline increased from 4 gigawatt peak to 6.2 gigawatt peak.If you look to the project pipeline, you could see that we have completed one project in Mansbach. In Germany this year, we increased the pipeline there from 2,000 roundabout to 2.5 gigawatts. 8 wind farms with 198 megawatts are under construction. One project with 6.6 megawatts is for external investors. We have received in total 6 wind farm approvals for roundabout 128.6 megawattsIn France, we got approvals for 2 wind farms and 1 project is under construction. In Sweden, we completed -- the construction management of Hultema 60 megawatts was completed. The project was already sold in 2020.If you look to the PV pipeline, the strong growth. We grew more than 50% on a year-on-year basis, which is remarkable. We are the sole projects in Romania with a total amount of 208 megawatts peak to TotalEnergies. And we are still ongoing to work also in several countries to increase our pipeline thus far.If you look to the P&L, we have an output which is similar on the last year's level. The EBITDA decreased by 22%, which is mainly driven by the project delays. And we are still waiting for the major project sales we expect to get in the last quarter.The operating performance are mainly driven, as I mentioned before, project-wide sales in Romania, 208 megawatts, the power generation performance, the project development services for wind farm projects, and the strong performance of service business. So in total, we increased our staff and staff expenses. So the staffs are 111 people. We could increase the expenses increase, therefore.So the depreciation increased due to the higher numbers of wind turbines in operation and remarkable are the financial results compared to the last year, usually distorted by m-t-m valuation of interest rates and loan liabilities. So interest results from valuations are minus EUR 2.7 million in 9 months of '23 versus plus EUR 23 million in the 9 months 2022. So this is really remarkable.So looking to the segment, we see that they are impacted mainly by the investment in own generation portfolio. We see the project development output increased by 10% to EUR 121 million, while the EBITDA is at minus EUR 3.4 million, mainly due to the project delays and the investment in the own generation portfolio. Yes, in the services, we are very successful, plus 24%. The output grew to EUR 20.7 million, the EBITDA by 40% to EUR 6.4 million.The Power Generation output growth is stable at EUR 52.5 million. The larger installed base that compensates the lower power prices and the lower wind supply. In the moment, we talk about, as I mentioned, minus 9.8% impact according to the [ Keiler-Heuter ] index, which is a lower wind supply due to the wind until the 9 months. But we see now in this autumn, now the last 2 months, we see a lot of movement in the wind yield. So it's very positive. We will see what we get. But it looks very positive.The EBITDA is at EUR 40.5 million, minus 6%. It's mainly due to the lower prices, having in mind that we came up with 50% which are -- of our portfolio, which are related to PPA prices, where we defined the PPAs and we closed the PPAs 50% went over the spot market. So this is impacted now by this lower power prices.The balance sheet remains very solid. I think remarkable in this amount is, we are close to EUR 1 billion now with our balance number. We have a liquidity which is decreased to EUR 83.8 million. Further -- expenses for further development, but also the realization of wind farms, where we are a little bit in delay. Usually, we want to have a little higher cash position, but again, it's only a delay. Equity ratio is at 20% according to bond regulations, 32.7%. The liabilities to banks are mainly related to non-recourse financing. And the corporate bond is still there with EUR 55 million, 5%. And I think this is really remarkable that mainly non-recourse financing.So ladies and gentlemen, this leads me to the outlook. In view of these market conditions, we are satisfied with the progress achieved in the first 9 months. Our counter measurements have taken effect and our resilient business model is helping to cushion the impact. Nevertheless, we are not immune to projects being postponed.I would also like to mention that those projects are only delayed and not lost. The good news is also that we are starting to see light at the end of the tunnel. So despite the fact that some projects are lagging behind due to external factors, we are confirming our guidance for the full year 2023 for the Group EBITDA in a range of EUR 30 million to EUR 40 million.We are expecting a strong year end. Several sales processes are ongoing in Romania and Italy. We also intend to put further wind farms into operation and under construction. We expect more than 600 megawatts in our own portfolio in operation or under construction by the end, well above the 500 megawatt target we defined in our scale-up process for end of 2023. The foundations for achieving our ambitious targets for the remainder of the fiscal year have been laid. We are still positive that we will achieve this.Ladies and gentlemen, before I conclude my presentation, please allow some remarks on the strategic side. The strategic review process concerning our U.S. activities was concluded and we entered in a structured sales process of those activities.To remind you, we believe that an exit from our U.S. business at the current market stage with a reasonable price level for our activities could free up resources which we could steer into our business expansion in Germany and other markets abroad.Negotiations with one interested party were intensified as part of the sales process, but no agreement with terms satisfactory to us could be reached at the present time. The process will therefore be extended to other interested parties. However, it is unclear whether a deal will be reached this year. At the end of the day, margin always comes first for us and we will not be put under pressure to sell this year.Ladies and gentlemen, this concludes my presentation. Thank you for your attention. We are now open for questions.
Our first question comes from Jan Bauer from Warburg Research.
Can you hear me?
Yes, I can hear you.
Perfect. So you already elaborated a little bit about the sale or disposal of the U.S. project pipeline. Is there any certain timeline you set for yourself or is it just now talking with other parties and then maybe we will hear something in the next year?
Yes, I think the chances are 50-50, I think, for this year or next year. So, again, I don't want to bring us in a situation that somebody is dealing and we want to have this price quality we think about which is right for this market and for our projects and our company.
Okay. So if I just crunch the numbers, so you expect a pretty strong Q4 in terms of project sales to reach your guidance. Can you shed a little bit of light on the sales process in Romania, U.K. and Italy? Which kind of projects and which kind of sizes we can expect there?
So in Romania, we talk about 60 megawatt projects and the 15 megawatt -- 4 megawatt projects, which is PV, which are PV projects, which we have in the last stage of, the sales process. In Italy, we talk about a pipeline, which is about 140 megawatt peak. So, and which are -- which are 8 projects, I think, 8 projects. And in Salach, we talk about 49 megawatt. But this is what we see just right now. It's a very difficult negotiation.
Okay. So the highest probability is that you sell in the end in Romania and Italy PV projects.
Exactly.
Okay. Regarding your procurement strategy. So, you already said at the beginning of the year that you secured like cabling and transformer stations. Will you pursue this strategy? So can we expect that maybe like, working capital is going up a little over the next months? So you again secure parts for the next year?
Yes, so we will do it on a regular basis. We are not under pressure. But in one example, the lead time for transformer station increased from 12 months to 24 months to 36 months. So we are really, have now taken time, because of our big orders. But nevertheless, we have to order on a regular basis. Maybe 2 or 3 substations in advance to secure delivery times and also for the wind farms. So this is, this will be done on a regular basis.
Okay. And one last question regarding your now revitalized offshore activities, do you think that you will need, to make any like upfront investments in terms of hiring new staff? Or will you be capable to deal with this project if you're existing overhead?
It depends on that what we see. To summarize this, the PDP8 came. The PDP8 defined not in detail how to, so the project development plan in Vietnam. They defined more or less that the, the regulations will come up and related to the, more to the local government and to a central office. And we will see what we will get then. But we are very optimistic due to the fact that we have excellent support in Vietnam and from the local and from the -- from the higher politicians. So from therefore, I'm pretty sure we have a good, good situation. And then we will see. And if we have just right now, we do the whole measurement. And we do the preparation of the offshore project. In the moment, we are enough with our people. But if we see good signs, then we will invest furthermore. We think about.
Okay, I understood that.
We think about that maybe, in the middle end of next year, we will come to the next -- to the next station. But -- but we're depending on the decisions of the Vietnamese government.
And also on the offshore wind business. I mean, like this year we've seen some trouble from peers, like in Orsted in the U.S. And also other offshore developments that, that they came underwater due to rising costs, interest rate and stuff. So, do you think that your offshore utilities will also be affected by issues like that?
The difference is that, we see, as for example, United States, the last -- the last tenders had been given, and the winner had been around, had to pay USD 450 million at risk for the next 5 years. So, you have to earn this money through the project. And that means, you need better margins, better amounts, higher prices. So, I think, every government, even in Germany, as well, they have to be careful. Otherwise, it will be a showstopper. If the prices are that high, that at the end of the day, the projects will not be built.So, I think this is a, a typical way of a, of a showstopper if the prices are too high on risk, too high on risk. And on the other side, we have changes in prices of machine and cost for machine and cost for steel and energy and interest rates. So, therefore, all this together is not really positive.
The next question comes from Holger Steffen from SMC Research.
Hello, Mr. Lesser. My first question is in connection with your project development section. We saw a big EBITDA loss in Q3 in this section. Maybe you can give us more details about this -- this figures?
Yes, sure. First of all, good morning Mr. Steffen. So, yes, this is exactly what I wanted to show a little bit with the delays. We have transportation permits are missing. So, sometimes the -- the trucks have to, have to go on a long journey. I have 1 -- we have 1 project, 100 kilometer far away. They have to go for 700 kilometers and had to start the permission process of transportation for 7 months, for 6 months ago. And, and if you have tiny changes, then Autobahn, the new company, Autobahn GmbH wants to have a new transportation permit.So that -- that, so there we are a little bit underlay with projects, where there was somewhere -- sometimes wait for 1 rotor blade or something like that to finalize the construction. So, and on the other hand, we would like to start more projects, but this is always related to the wind turbine manufacturers. So we are in a little bit in delay in this as well.So, this is, and to be honest, we wanted to finalize the sale of 1 remaining project earlier. So this is usually, we are a little bit behind our plan, but we are not far behind our plan. I think in total, maybe 2 months. And we think we get it done until the end.
Okay, fine. And 3 months ago, you have mentioned possible project sales in Poland and Panama too, until the end of the year. Now, it seems that these will be postponed. Can you give us an update about the actual situation there?
Yes, in Panama, we had with some, with 1 investor on the final stage of the process, he stepped back and we -- because we couldn't come together in some -- some important positions. So, and now we have to restart the project -- the process again, which is not -- not, not that difficult because we have other interests as well. So, and in the -- in the middle of next year, we think this -- this sales, I hope this sales, we get the sales under control again. Was Panama and Poland?
Poland.
Poland yes, due to the -- to the changes, we got a delay in -- in the grid connection. So, we wanted to sell a 200 megawatt peak project, several projects, but exactly in this area, there is a delay in -- in grid connections and, therefore we couldn't sell it in that amount we would like to sell. So, we wait until the prices and the value of the projects are better, and then sell it next year as well, hopefully.We have to see -- we have -- we are -- we are not in charge of the grid connection. So, therefore that's why I said, hopefully. So, we have to see what -- what these guys are doing.
Okay. Fine. If we -- if we take a look at 2024, you have mentioned these projects could be -- could be say, could be ready for sale. What are the further projects, which may be so, which may be ready for sale next year? Can you give us an idea?
Yes, I think we work on a lot of projects in South Africa, in Poland, additionally, and we have a project in Italy. We will see, but I think I will come back at the end and we'll give you a much better overview. And so now, I don't want to go too deep into detail because we start with the New Year with that what we have, managed, and that's what we want to manage. So we have a new starting point and then we will come up. But nevertheless, we are in -- in several countries on -- on the road and work very heavily on the project. You see the project pipeline is increasing. So, and so we -- we are -- I think in a very, very good shape, especially in the times where land is needed, sites are needed to -- to have the basis for a very good business in future as well. And that means also projects for next year.
The next question comes from Guido Hoymann from Metzler.
Yes. Good morning, gentlemen. 2 questions, please. The first one is on your own generation. And how much of your output there, say next year or the coming years is already, yes, sort of locked in via whatever PPAs or any sort of contracts. That would be the first one. And maybe also at what level and the second one is on, again, on your, your timely procurement of transformer stations, cables, the funding and et cetera, which I think first of all is -- is certainly worth mentioning. Given the problems of a lot of major players like real estate, so that I think that was certainly, very well done. But the question is, what happens once you have to buy the new stations or new cables at then a higher prices. And, once you're getting them fully exposed through the higher funding costs, once the loans from KfW are absorbed, et cetera, so do you think that in the foreseeable future margins will come under pressure because selling prices for the projects remain, say, more or less broadly unchanged, or do you expect prices for projects to move up sort of in line with rising costs? So what is your expectation here, margin pressure or, let's say, stable margins and higher prices then in the end also for the investors?
Yes, so the cables and the substations we ordered, so, for example, we standardized the transformer stations so we can take them for nearly all projects we have in the range. So that's why we can -- we can make the substations for every power plant we want to deliver for. So and we secure with that this year and it goes next year in the middle of the year 2025. So therefore, we are very convinced that we have for cable works and related. And the cable works, we only order 3 line, and 3 different diameters from cable. So we take for all our projects. So we standardize this as well instead of 5 or 6 different diameters.So therefore, we are in good shape to deliver this for the next, I would say, 1.5 -- once nearly 3 years, yes? So, but that means also, you're right, we have to order maybe substations, transformer stations now in the next half year. So, for the next project afterwards, but that we will do very, very careful. And what we see on the other side, if you talk about the situation that we have now more efficient wind turbines, so this is something which a little bit lowers the pressure on the margins due to the fact that with now 170 meter machines, this is a -- this is next grade of efficiency.So therefore, this is plus and minus in different ways. The interest rates are important. You're right. So, and until our projects we start until middle of next year according plan are, can be delivered with this KfW loans. So therefore, we are safe with that as well. Yes. But nevertheless, it is always important to look for the interest rate like in every branch. To be honest, from our side, we think that the interest rates could go down in the next couple of months, but we will see.Related to that, what we get from our input related to PPAs, so as I mentioned before, we have now more than 50% with PPAs secured, so it's everything, every project we can get done for a longer time, minimum 1 year, but we have also projects with 5 years PPAs. And then we are accepting -- also, lower prices, which are always usually on about 20% above that what we get within EEG tariffs, at minimum. So therefore, when we see advantages, we try to fix it with PPAs as well. And this is another point where we release a little bit of the pressures on prices and economically visibility.So therefore, we are positive, still positive. And have to do our usual work and being capable to negotiate these PPAs for us and our customers and the services. We are talking about a 2.8 gigawatt pipeline where we do and negotiate this. So we have a good impact in the market due to the fact that we have one of the biggest green energy portfolios where we can sell our green energy. This is interesting for a lot of companies. So therefore, we are positive. This trend is still there and is increasing that everybody wants to secure their purchasing of the energy.
Our next question comes from cast Karsten Von Blumenthal with First Berlin Equity Research.
Markus, this is Karsten. Can you hear me?
Yes, I can hear you.
So you already mentioned supply chain issues. My question is the Siemens-Gamesa quality problems, which result in a delay for onshore wind turbines. Are you affected by that? Could you tell us how many projects are affected? How many megawatts? And how long the delay might take?
Yes. So we have -- we are not really affected by this. So when we hear this, so Siemens informed us about the technical problems. We went in with independent technical research company at 8.2%. They went through the details of the repair suggestion and about the new changes in the new models, which will come up in the next phase of Siemens. So it is the SG155and SG170, which are affected by this. We have only 1 project under construction where already this repair measures are in.This is changing felt was 19.8 megawatts. So for us, it is no problem. We don't -- we went through the technical details in -- really in detail. And we see even with repair or with the new release, we see now no problem. So therefore, we are convinced that this is in a good shape, all machines. And so therefore, we are optimistic. So with the SG170 and the new -- this is affected by them as well. As I said before, we have already a part on order project, which closed about 60 megawatts, which we started now the construction where we get to deliver the machines somewhere end of next year. So -- and there is -- this is the new design. And so therefore, we have no issues to expect.We wait with another 66 megawatt projects with SG170 and wait for the final signing from Siemens for the contract so that we can start construction -- so again, I think this is one of the best look at designs we will have in the market now with the SG170 because everybody is careful now.
All right. I'm happy to hear that the impact is rather minor. Now this 19.8 megawatt project. Do you plan to commission this project this year?
We would like to. Yes, it's the target, yes.
Okay. And what about your -- ?
Sorry, the 19.8 megawatt, this project change is under construction. They will be built this year.
And commission this year. So it should be finished at the end of –
I hope so. According plan, yes. So -- and the 66 megawatt we want to get signing now in a very short time done. So that we can start construction.
All right. Great. My next question is regarding the EU wind power action plan. Is that helpful for you? Do you think that is a relevant change in EU regulation that helps you? Or what is your view on that?
Yes, I think that is a good move. Nevertheless, all these regulations must find their way through the government, through the land jurisdiction and then to the local -- local offices where you have very small municipalities with small units. And so therefore, it's -- I think it's -- there, it isn't now. So we think that we need some time. And then we will see in a moment, we don't have any effect.
All right. Looking into 2024, in your view, what is the huge challenge you have to face as PNE?
I think it is -- we have several effects in the moment, as I mentioned before, interest rates is certainly an issue, but also the transport permissions, if you were very detailed. So there are a lot of points which have to be sold. But this is interesting. We see that all of these things are going to be sold far more later. And we will see that a lot of interest will come up in the market when the hydrogen business is increasing, and that's what we see just right now that the investment decision had been done in Tsukuba example and others. So therefore, it's a special time now, but I think we have a lot of positive development in front of us.
All right. Perhaps one last question from my side. What is your plan regarding the end of the year regarding your own plant portfolio. How many megawatts would you like to have in operation?
We want to have -- at the end of the year, we want to have -- we want to finalize another 58.9 megawatts. So plus that what we have, but we see just right now that it is -- that we are on the edge. And maybe some of these megawatts will come in the next years. But the projects -- so 5 projects we are in the last stage .So optimistically you said, we would have 349 megawatts -- 348 megawatt plus, round about 59 megawatts at the end of the year. That would be a very positive case, but I think it will be less. Important is that we will have in any case 626 megawatts under construction or in operation in total.So I think this is a very, very good number having in mind that we started in 2017, we scaled up, and we started and we said we wanted to have 500 megawatts under construction or in operation. And if this is fulfilled, we have much more than expected in the line, and this is positive.
There are no further questions at this time. I hand back to Markus Lesser for closing comments.
Yes. Thank you again for your interest. I wish you a very successful day. See you soon -- see and hear you soon. Bye.
Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.