Q2 2020 Sociedad Quimica y Minera de Chile SA Earnings Call

Good day, and welcome to the SQ M second quarter 2020 earnings conference call. All participants will be in a listen-only mode. So you need assistance, please signal conference specialist by pressing the star key followed by 0 months after today's presentation. There will be an opportunity to ask questions to ask a question. You may press stores and one on your touchtone phone to withdraw your question, please press * then two, please note that this event is being recorded. I would now like to turn the conference over to Kelly O'Brien, please go ahead ma'am.

Good morning. Thank you for joining our second quarter 2020 earnings conference call. This conference call will be recorded and is being webcast live following this call. You will be able to access the webcast at our website ww.w. Our earnings, press release and a presentation with a summary of the results have been uploaded to our website where you can also find the link to the webcast joining our call today as Speaker Ricardo, CEO CFO and Pablo Ramirez vice president of lithium in iodine businesses, before we begin we would like to remind you that statements in this conference concerning the company's business Outlook future economic performance has anticipated profitability revenues expenses or other Financial items anticipated cost synergies and product or service line growth pact with other statements that are not historical facts are forward-looking statements as the term is defined under Federal Securities laws. Any forward-looking statements are estimates reflecting the best Judgment of sqm based on currently available.

information and and

Involve a number of risks and uncertainties and other factors that could cause actual results two different materials the from those stated in such statements risks and uncertainties and factors that could affect the accuracy of phone not looking statements are identified in our public filings made with the US Securities and Exchange Commission and in our earnings release issued last night and these forward-looking statements should be considered a life of those factors. We assume no obligation to update such statements whether as a result of new information future developments or otherwise except as required by law. I now leave you with our bank and start over, Good morning. Thank you for joining our earnings call today our second-quarter. Net income. As you know reach approximately fifty million dead certainty continue in the market in which we sell their well also many positive things that I would like to comment on before we speak more specifically about the market first month.

We teach our oil is statements our sustainability report which complies a significant amount of useful information related to the sustainability of our business. This year was the first time that this report was outdated and certified by the third party as a global company. We are aware of our responsibility to protect the environment and communities when the staff that usually means continuous Improvement for that reason, we're finalizing an ambitious plan related to sustainability and we would release our goals in the coming month. I would team in Chile and around the world that's not cease to impress me a credit that dedication hard-work and attention to safety and health measures to to the reason why we had been able to safely continue trading with no material disruptions for the more they have not only been able to meet our production goes so far in 2020 in some products. We have been a month.

Feed them as we mentioned in the earnings release last night. I will leave him production levels are at all-time high and we are currently producing at the rate of how may times per year while we keep on working when I would leave him carbonate at least Microsoft out of sight expansions. This production will allow us to increase our marketing plan. Do you need 2020 even as market demand is expected to be similar to levels seen last year looking at the numbers of its last night our net income for them to reach about fifty million lower than the 70 million reporting during the same period last year but revenues gross profit and net income during the second quarter. We're all highways and what we received the unit the first quarter of the year in line with our expectations without significantly higher sales volumes in our SPN lithium and Industrial chemical business laughing.

when we compared to the first quarter in the fertilizer Market, we so lower potassium chloride prices in the second quarter and may continue to see price volatility during the remainder of the year is lower price in the market and then

The short-term and directly and negatively impacted the price change and especially fertilizer Market on the other hand I get prices in are you done in the first half of the year had a positive impact in our results? I'm going to let Pablo, any more detail about what we are currently seeing in the identity of the market wage. You suing her knees release our Revenue related to leasing sales significantly compared to the second quarter of 2019. This was related to lower prices in the little market wage, whatever pricing the business line were lower doing the second quarter. And as a result of weak demand seen during the first half of this year. The lower prices were partially offset by higher sales volumes off during the second quarter of 2020, which were approximately

60% higher than our sales volumes reporting to in the first quarter. We are producing a record rate accumulating inventories giving us the flexibility to continue growing our markets in that club workers at the same time. The quality of Our Living Products keeps on improving while our production costs keep on decreases.

Despise despise limited visibility and I'm going challenges facing in the short-term across all of markets. We remain optimistic about lithium during the second quarter demanded China was a slightly better than our prediction. We also saw a significant increase in the sales of electric vehicles in Europe in western Mass and every day. We see a new announcements related to new developments in a life Elysium battery Market, which good boost demand in the coming years.

The interference for electric vehicles on our regulatory level and from consumer level remains strong these give us confidence in the long-term prospects on the little market and we continue to invest in the development of projects to ensure that maintains our leading position.

In the market, we saw second quarter price remain at level similar to those reporting during the first quarter of the year. We stay to the market demand this year. We lower wage. We believe that our sales volume during the second half of the year will be lower than those reported to read the First cast reaching under $11,000 in 2020. We have seen a packet in the end users related to 9. Biocide an x-ray contrast media. However, other areas like human and animal Tricia's has not been packed finally home ec interesting growth opportunities related to a Decepticon sanitizers. However, the size of the segments are relatively small to compensate the decline in other areas Thursday. We are hopeful we could see rows Iraq demand Road in 2021.

I would not pass the go to Colorado who will say the few words about our financial situation. Thank you for thank you everyone for joining the call today. We have a diverse portfolio on a strong balance sheet off this coupled with our high-quality assets have been key giving us operational flexibility and resilience. We are always diligent in working to maintain our high competitive wage. In fact the second quarter our cost per tonne decrease in almost all of our business lines compared to the first quarter. They say this can be reflected in our office which was approximately 34% during the first six months of the year slightly higher the margin reporting during the same period last year we ended the second quarter with over 1 billion dollars in cash and cash equivalents, which will allow us to continue to invest in projects as we see our Catholic plan remains has changed since March

We expect to spend approaches.

350 million dollars this year related to maintenance and growth Catholics. We believe that we should be able to accelerate our Catholic plans in 2021. Make up for any delays. We have seen during 2012. Thank you and operator. We may now go to Q&A session. Thank you. God will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys.

If I anytime your question has been addressed and you would like to enjoy your question, please press * then two at the time will pause momentarily to assemble our roster.

And our first question will come from Isabella Simon with Bank of America, please go ahead.

Good morning, everyone. Thank you for the call. My question. I have to one of them if you could provide an update about the environmental situation in discussion with the regulator and chili we saw recent news about this matter. If you just could give us an update about that and second is on lithium. May I mean you'll you guys are prioritizing market share and volume is water or air this year while prices remain fresh or bright. I mean, how what is the rationale behind it? And how do you see this balance between market share recovery and prices Beyond 2020. Thank you.

Ricardo Ramos speaking. Now as you know, we are fully committed to the protection of the environment in the slot, Now. We are working on modifications to the compliance plan affording to the comments of the environmental curve and we hope and we're sure we're going to obtain all the necessary approvals of the new plan in the coming month that's on all the detail regarding a Mentos issues of the company are fully reflected in our financial statements. You can you can review it on on on the documents. We file yesterday.

Second question. I think it's for Palo regarding lithium grease. Yeah. Okay. Well, as you know today this year the man is very effective because of the Kobe situation. However, we are here because we really delicate business in the long term. So that means that we are really committed to reach the goal that we have by 22025, which is Bridgestone say it's worth more than 150,000 tonnes a year. So that means that our plans are not changing because of the situation. So that means that we want to increase our market share Thursday. We are fully committed and that that we are producing as a high regular in the plan. We are accumulating inventories improving quality. So that is the part of the study that we are trying to do in order to gain marketshare regarding a little something that we are starting applying right now during this year. We will continue doing in the next year's.

reality today

Disable price wall. Yes. I mean the demand to this year is is is good. So at the end what will happen with the price will be the consequence between the supply and demand so we will see more. Maybe doing this year. Yes. We will see more pressure. But at the end I will tell you this increase the market the market share. We are fully committed on on that.

Okay.

Our next question will come from Joel Jackson with BMO Capital, please go ahead.

I have three questions. So I thought I would ask them one by one. So my first question is Ricardo in your prepared remarks you talked about I believe or maybe it's table but how your lithium quality getting better and your production costs are going lower. So we see that your production costs drops about $1,000 a tonne, um in the second quarter to give us some examples or some idea exactly how the quality is improving. Where is it improving and what let's the lower production costs in second-quarter. Thank you.

Okay, so Paulo speaking. It is important to say that when we are saying that our quality is improving. Well, this is something that we are doing every time so that means that we are continually improving the quality because all that is that the customer start requesting so it's something that is ongoing and I can say that today we are producing very close but it's not in particular may have we used to have any issue of that is because the demand of our customers is that direction so it's a mass that we need to do but the good thing and as we explained the in the in the release is that despite we are able to produce a product that the customer needs were also we are doing that remaining the loss the low cost of production so but my my point here is that this is a continuing effort that we need to do because the the living, you know quality and the legal process will change with the passage of the years because of the technologies that our customers will use dead.

In the different classes are applications.

Can I my second question would be so you have the new volume and you're pushing out your share. And that's fine. Can you elaborate where you gaining share this year in a flat Market your dating life? So is this across different grades? Is it in different regions is is just you being very aggressive on price to win business where give us examples of where you're winning share a Jeep Wrangler as possible, please.

Yeah, well as you know, we are well-diversified.

Because we Supply listen to the battery segment to the industrial sector. So that means that we sell our lithium globally in in different regions. How long do they of course because of what's going on with the electric vehicles close to the 80% is allocated in Asia. And today China is very important for us and we'll figure it out that will be more than one third of our sales during this year. So we are increasing a lot of in China, but in Asia in general which where the demand for electric vehicles is dead. We plan to be there. We are on East

Helpless and then my last question is, you know, I think it's been eight quarters in a row where we see Eva. Contraction. So you better Contracting year-over-year consensus is expecting you to deliver flat wage 12020 you're behind on that expectation of consent is in the first half of the year and based on your guiding. It seems like you would expect lower earnings in the second half of 2028 versus first second-half like lower earnings the second half vs. Second half of last year. So is it reasonable? You have a chance to get the flat either this year or will you probably be dead?

Are you busy. Well, you know that we have a we are a special company that says that we have 5 Business lines that behaving completely different ways while one business line may be going down because of supply-demand or or particular issues in in that particular business another one maybe going down. So I think it's better to go one-by-one if you want to assess how much is going to be for the full year, of course, 20 20 20 has been affected by covid-19. For something in particular, but the impact that it has had already quoted me off on the demand is having any impact or the amount of lithium is having an impact also in potassium chloride and the lower cost for that is having an impact on the prices of a potassium nitrate, so

Answering your question on how much the Aveda is going to be for the year. It's it's a function of how each of the business lines will behave with the particular situation. So of each one.

Okay. Thank you.

Our next question will come from Javier Martinez with Morgan Stanley, please go ahead.

I think you a lot of God will probably have a question for Ricardo. We will really appreciate if you can't share with us some of your intelligence and give us some color on this impacts our HR today knowing the value chain not talking about inventory. I'm talking about interest inventories off stage of the production process know. Can you give us some news the big picture the least of where are we do you think that those inventories make Peak? Thank you.

Okay, thanks. Got you. Well, you know that at the beginning of the year immediately after the first quarter, we saw some inventories in the whole chain. So that means in Lethal chemical, I'm sorry Ami leave him chemicals or not and also cathodes was not the same case or TVs because the companies can react quickly to the to the demand and production so often we used to we used to see that however, you say before the remaining the second part is that they getting some recovery. So that means that the the companies started, you know selling cattle dog and you seem more lethal chemicals. So we have been seen some sort of reduction. Anyhow, I would say that today we are still have a lot of inventory in the evening. We are off the higher-cost producers are deciding not to compare the whole spot win because of the high cost that they have and I would say that in that regard. The pressure is only battery is coming from, New Jersey.

Today, I would say that we we saw you know that we are getting more orders in terms of selling different chemicals carbon hydroxide. So that means that I would say that

In regarding to a catalyst and I would say that labels of inventory is in terms of cattle that have been adjusted to more normal values same with little chemicals in exposing me nasty. Like I think that is is a we have Tae batteries.

Thank you.

Our next question will come from PJ juvekar with Citigroup, please go ahead.

Pardon me. Our next question will come from then Isaacson with Scotiabank, please go ahead.

Hi, this is yet on for been. Thanks for taking my question. I apologize. If this was asked I I got disconnected for a moment there. But I just wanted to ask a little bit more detail on those lower costs and just this is ability up in like by segment if you can and the extent with which we can see that either improving moving forward or whether it should remain at the levels. We saw in the second quarter. Thank you.

Thank you. Thank you Seattle for for for your question. Well, there are several factors that of course affect our cost one that is quite relevant is the exchange rate with the with the Chilean Peso the Chilean pesos appreciate it. When compared to last year is of course helping us on on our cost to give you an idea approximately four or five hundred billion of our total expenses per year are in Chilean pesos. So so that is a quite a a relevant part of the city also energy. This year has been lowered than how it was last year. But also we have been improving in all our business lines to make sure that we can keep on producing as Pablo was saying before we hire qualities but also with lower-cost remember that the wage currently few coverage plan. It was under a ramp up over the beginning of last year while now is significantly more material. Yep.

Kind of course that is helping us to not only improve quality but also be able to reduce costs and there is another another variable that you have to keep in mind, which is the fact that we produce the five products or the five business line come from two different natural resources. So there are several common expenses that are allocated based on IFRS rules in different businesses that may have certain changes in the cost in one business line that are somewhat compensated in other in another one. So that's basically off the situation of the company.

Excellent. Thank you. And if I can just add one follow-up just on the iodine business just if you have any visibility on how the third quarter has gone, I believe last the last public comment from you guys. There was weakness specifically because of the medical application. So if there's any do you have any visibility on Q3 so far?

Yeah, sure. Well as we said in the in the release we expect that our sales in the third quarter as a full partner will be less wage at the first semester and that's why we believe that finally this year. The demand will be lower. So we spent less safe. And as you say well is is this all this impact with the virus Corolla, 19, we believe that's a temporary shock for the for the demand today. For example in x-ray contrast media people is not going to the hospital to to take the the exams. So they are postponing the used we have sending batteries, you know in that applications, but as we said so we we leave off the remaining would be nowhere in the second semester. Anyhow in next year because we don't see any fundamental change in the supplier the remind of this Market, we believe that finally the market will be Goldberg.

2021

perfect. Thank you very much.

Our next question will come from PJ juvekar with Citigroup, please go ahead. Yes. Hi. Can you hear me?

How about dear?

Yes. Hi. My question is, you know, you talked about sort of pursuing this inventory and volume or Price strategy how much inventory of lithium carbonate do you have that on hand? Maybe you can describe that in number of months and one of your competitors who reported recently was complaining about high levels of inventory in China and Australia, so I was wondering if we can sort of give us an idea about where the inventories are globally.

Okay, so explain before we are producing a record labels this year. So that means that we were we were, you know, increase our inventories we figure out the batteries in a row approximately 20,000 a medic dose of Lte this year. So we have more inventory by the end of the year regarding to the high levels of inventory page will explain before we need to Define clearly. What do we mean with inventories? Because one thing is to have inventories regarding to live in chemicals. And the other thing is Roma Downey has to produce anything chemical for example is probably mean so as I told you before because of the pressure of prices what we have been seen right now is that high cost producers that compare the speed limit to how many guys are postponing the decision to produce so which is well, I would say an opportunity for lethal chemical producers that has slowed down.

But that is a little bit the situation.

You know you gain marketshare partly also because your competitors turn down their minds, so if you assume that demand comes back next year and computers also bring their plants back on. What do you expect will happen to market share. Thank you.

You said well as I explained before we had a clear goal for 2025. So that means that no matter what happened with the supply. We need to grow more than the demand and we often I like to that goal that okay is is is our competitor decide to take some decisions. Well, we have the product we have the quality. Also, we have the advantage of that. We you know that we are a very low-wage producer. So we will use our competitive advantage in order to accomplish the goal that we have by 2025.

Thank you very much.

Our next question will come from Creek Terry with Deutsche Bank, please go ahead I Ricardo in same a couple of questions to me. I just wanted in terms of twenty-twenty specifically you've done 21,000 tonnes of of of product year-to-date in last year. You did 45,000. Should we expect that? You just just based last year, or could you be quite a bit above that? Just trying to get a sense of your latest thoughts on sales. Thank you.

Okay. Thank you. And my second question is about your market share.

Yeah, well, yes, as you said last year, I will say we're $45,000 per year and this year we expect to sell more than that and we will increase our market share.

Okay, thank you. And then and just in terms of the 70,000 tonnes you have today. Can you come in on the amount of hydroxide you expect for the year?

Yeah, sure. Well you I mean the 70,000 is the capacity that we have for the lithium carbonate production in terms of relief in sight today our capacity thirteen point five thousand metric tons per year off and not regard to explain in a release. We are investing in a new line of hydroxide. So next year will reach 20,000. Okay. Thanks Jeff just to clarify this important to remember that to produce our lithium hydroxide. We use lithium carbonate as a raw material. So that's something that you need to consider when you figure out the the the calculation for the capacity for both products.

Okay, my last one just on me on Holland. When can we expect the next update on on on the project? Thank you.

Yeah, I know what we are. We, you know, we are working here with our partners with farmers in the project. I would say that we have been progressing very well and according to the plan, but we still anticipate before we expect to to release more news next year in q1.

Okay, great. Thank you very much.

Our next question will come from Cesar Perez. Novella was btg pactual, please go ahead.

Good morning, gentlemen, and congratulations for your second quarter results. This comes back essentially to an earlier question. You just mentioned that your your car been in production for 2020 will be roughly $70,000 metric tons implying that you will hold over 20,000 metric ton of inventory as we go into 2021. I mean this this shows a high confidence in in in Industry demand in the years ahead of fuelled by a

Car maker maker demand and and Industry Recovery, of course and my question here relates on what demand growth parameters are you using and what this may mean for how long for lithium prices next year. I believe that you mentioned lower prices in the second half and growing market share it is this something that may exert pressures in in in in a medium-term as as or or are you seeing actually Supply, uh in in in lithium chemicals as competition step-backs and and and and it's a globally get get stoned.

Yeah, yeah. Okay. Well, first of all, I mean as we said before we are fully committed with the film business in the long-term, we believe in the fundamentals. We still believe that by choice by 2025 the remote will be more than a hundred thousand per year. So we we believe in the in the long-term growth. That's that's for sure. We are so committed that you said we are a producing more volumes. And also we are investing also in our capacity and we pretend to reach more capacity by the by the end of the next year. So that means that we are really committed and any changes to the fundamentals of the of the business, of course in this year demand was very effective because of the current situation. So that means the next year will bring you to what having with the situation. But anyhow, we expect a recovery on that today is so early to say how we really grow for the next year. I think that we need more information.

Omega more clear number however, as I said before we are committed with the role a long-term goal. So that means that we need to increase our market share and that means also that I'm sorry, that means that we need to increase our sales. We need to grow our sales more than the demand and that one we are trying to to do if that will put some pressure of prices should be everything will depend on the demand and Supply, you know that the price will be the result of the supply and demand but it will not change the plan that we have in order to increase our market share.

All right. No, thank you, very

Clear finally met on our expansion what level of progress has has been obtained construction wise for the hydroxide and carbonate plant and I need to walk in between the new carbon and expansion and the existing 70,000 metric Total Line in terms of a product segmentation.

Regardless speaking. We are working on the project. You know, if we had some issues regarding the situation in terms that we reduce some of the non-essential workers as facilities. That was a requirement from the health authorities. That's why some of the project was in some way delay. That's why they the Catholics for this year is going to be lower than the original expected but we expect that we will recover the time and we will recover some activities during next year. That's why we maintain to have some start type of the new facility at the end of next year. But we're sure we have everything ready. We're working. That's the only situation as I explained you before is we need to reduce non-essential activites as our facilities. In order to be according are wage. No protocols regarding the Kobe situation, but we're working fine on the project.

Okay. Thank you.

Our next question will come from Sebastian Ramirez, please go ahead.

Hi guys, guys congrats on the results two things for my it would be the first in relation to cash cost you were referring to that early on the call. But if it's off of what you need and did you on the 2nd quarter so you can ask you what should be if this level should be the normalized level going forward and the second question is regarding iodine that you are now delivering products under your name plate capacity. So should we think that your building inventories there as well on how do you think that off that replenishing should go within the year? That's for my side.

Well regarding regarding the this is Katara speaking regarding the the the cost that you that you asked. Well we were predicted that the current cost situation that we have to continue going forward. And of course we're working on improving our cost position in every single business right now. Of course, keep in mind that within our cost structure in the leasing business life. We include the monthly payment that will make you call for which are a fraction of the price and the lower the price the lower the the lease payments assist describing the the tables of the contract that are disclosed on our station.

Regarding your question.

Yes sure wall regarding to the the Island production and and inventories world today. We are we are producing in a in a normal rate as long as you know, we are coming from low level of inventories. So today of course that the demand will be reduced in the year. So that means that we will use this situation in order to recover our inventories, which is something that we want because in the past we used to have low levels and this is not the way how we we can we would like to work for us. It's important to have inventories to be there for our customers. So we will use this situation to regarding batteries and to be ready was the demand will be there again.

That's perfect. Very clear. If I made out of something very quickly in regards to the solar salt. You said the water you delivered tons of that month on the fear of the hundred and fifty that our plan for the year should be a sign in equal parts during the the rest of the year or will be more towards Thursday the 3rd Q on any news new projects on that side. That would be helpful to hear from that.

Hi Ricardo speaking. We expect you ask you may as you know, we expect to sell this year in in solarsoul business close to a hundred and sixty thousand metric tons. And and most of the sales would be in the third quarter some remaining sales in the fourth quarter, but Security will be higher than fourth quarter.

So we as you know, this is a long-term agreement in order to supply solar Source. It means we will continue to sell you the next year to the same client 2021-22 and we are really close to to to new agreements in commercial business in the short-term. I expect to to have some news during the next two quarters in order to inform you that we close New Deal seemed a long-term agreements of the solar. So there's a lot of activity in the in in this in this in this business sector in Europe and different areas of the world. That's why we are very positive about having some new agreements in the near future.

many

our next question will come from Leopoldo Silva with Lorena valve, please go ahead.

Hi guys, and thank you for the opportunity. I have several questions and I would like to then to make them one at a time. So my first question is regarding iodine off. I would like to ask you could you tell us what is special about this business that despite having a weak demand as you have said and weak demand for the second half of the game. Are you able to sustain a fairly good $35 per kilo price that you have to do with the product mix and match. So what could make it correct downwards also, I would appreciate if you could help us understand. Why are you talking so much iodine abroad as your customer asked tearing Customs data shows, you shipped 60% more than what you produce. I mean you you sold during the

quarter

Okay. Sure. Well, as I said before we see the price level for the second semester of the year will be similar to the first semester off. What is behind of there is what I already said that we are not seeing any fundamental change in this business. I mean, we don't have music line and remind me the remaining Sovine affected because of the specific situation of the values. But as I said before we expect that the demand will be recovered there now see any important news fly of your industry actually, if you see the supply of the RAV4 from 2014 has not increased. So that's that's why I'm finally the prices they can leave room between supply and demand so that's why we see and that's what's going on regarding to the price regarding to do we are second question. Well, the study that we have is two remaining. Yep.

So he's close to our customers is what we do normally well this year because of Kobe situation will increase a little bit, you know, the the phrase of product in order to be there just in case but it's any other thing that that behind is normally what we do. We it's part of our strategy to build to build inventories close to our customers.

Okay, second question is regarding lithium so correct me if I'm wrong, but I understand that among the product that you sell from the seller your cost money located on a revenue basis that that means if you in potassium industrial chemicals and parts of SPM. So my question is given that you've started shipping stronger industrial chemical volume and will continue to do so as you just said should we expect to see with reduced cash cost as we as like we saw this quarter for the coming and for the coming years and and also here I would like to if you could give some color on how much of the cost reduction quarter is can be attributed to to this what I just said or and maybe on what can be attributed to hire run rate efficient.

Organic efficiencies of your lease this of the of the overhaul of the plant and and also if you could just give a glimpse of the depreciation pertinent that was quite uh-uh. Hi this this quarter tanks.

That's quite a quite a lot of question. Let me let me try to try to help you out this. Well, yeah, we're selling solar cells this higher solar cells of course are are positive news, but they have no religion with the cost of living the lower cost-of-living as explained before are a function of a improvements in the plant. Remember that this was a plumber started production at the end of 2018. It was basically verified during 2019. And now it's at full production with higher-quality recalls. So so that is that is what is happening there on top of that. We have a week and Chilean Peso. We have a lower cost of energy and on top of that page. We have a lower royalty to Corporal because of the lower prices that we're seeing. Those are the main factors of the lower cost that we are correct.

reporting in

This concludes our question-and-answer session. I would like to turn the conference back over to Kelly O'Brien for any closing remarks, please go ahead.

Thank you for joining everyone. We hope to see you again at our earnings call in November.

The conference has now concluded thank you for attending today's presentation. You may now disconnect.

Thursday