Q3 2020 Norbord Inc Earnings Call
Okay.
[music].
Good day, everyone and welcome to Norbord Inc.'s third quarter earnings Conference call.
A reminder, today's call is being recorded and that cost on that side.
W. W. W. Dot no <unk> dot com Norbords discussion today may include so <unk> projections and forward looking statements regarding <unk> business future actions and expected results. These.
These statements are subject to known and unknown risks and future results may differ materially.
All the information on known risks. Please see the caution regarding forward looking information statements in all watch type you already sports Twentytwenty annual information form and the cautionary statement contained in the forward looking statement section or no what's management's discussion and analyze the states. It's November four.
[laughter] Twentytwenty.
And so I would turn the conference over to Peter <unk> Vine bargain, President and Chief Executive Officer. Please go ahead Sir.
Well, thank you Sandra and good morning, everyone welcome to our Q3 2020 conference call.
I'm joined today by Robin Lampard, our CFO Heather.
Other corporate <unk> director of corporate Affairs, and Robert Winslow, Our Vice President of Investor Relations and corporate development.
This morning, I want to take a moment to highlight a few key points about our Q3 results, including or does this decision to permanently close to 100 mile House in British Columbia.
Oh, then ask Robin to highlight a few financial items before make some concluding comments.
Your questions.
Q3 was our strongest quarterly result ever.
We generated $322 million of adjusted EBITDA, nearly 20% above our previous best quarter in Q2 of 22.
In North America.
And you'd recovery and U.S. home construction activity carried over from Q2.
Repair and remodeling was also strong at a quarter with the amount running at record pace.
Record low mortgage rates and the ongoing trend towards greater work from home options have created strong incentives for people to purchase new homes.
Undertake renovation on do it yourself projects.
Remote working has continued to drive demand for more affordable suburban homes, which is boosting single family homebuilding, that's consumed three times as much or B S multifamily.
Industrial demand has also continued to recover on us now normalized back to and in some cases above pre corporate levels.
By way of reminder.
We report capacity utilization rates based on our available capacity.
It has included 100 miles, but excluded chambord into the dominator.
On this basis, our North American Mills produced at 86% of available capacity in Q3.
No if we exclude both the curtailed chambord now to 100.
Wow smells from.
From this calculation.
We produced 92% of the capacity that's true run our mills hard to me, it's very strong customer demand.
Further excluding line one other quick steel mill, which was still crutches for nearly half the quarter.
We took just try to mill days of downtime in Q3 compared to 143 in Q to Q2.
Oh, it must be suppliers struggled to keep up with the stronger than expected rebound in hours be demand leading.
Leading to record high benchmark prices that has carried into the early portion of the fourth quarter.
Our adjusted EBITDA in Europe also increased from $2 million through Q in Q2 to $16 million in Q3 on the strikes off to recovery in demand.
And improving European always be pricing.
We continue to make great progress I don't remember that smell it into third quarter, where to face to commissioning is now well advanced.
The mill is now consistently producing out as phase one capacity and starting to ramp up towards its phase two capacity of 945 million square feet on a tree edge basis.
This expansion will help us continue to supply substitution driven no agreed amount growth in Europe 40 years to come.
Now to do it through the discussion to discuss her decision to permanently close to 100 miles mill in British Columbia.
Disclosure will reduce our stated north American capacity by 440 million square feet three assets.
As you know the 100 miles smell has been indefinitely curtailed since August 29 gene.
In response to a wood supply shortage and rising fiber costs or to the mountain pine beetle epidemic and more recent certainly significant wildfires.
These factors led to a 50% reduction in annual allowable harvest <unk> region, serving them, though.
Earlier, this year and in reaction to the pandemic.
We adopted a more flexible operating strategy across our manufacturing platform to be more agile in responding to the changing market conditions and customer requirements well containing manufacturing costs.
Asked Norbords highest cross mill and with an ongoing what supply shortage and the region it became clear that the.
<unk> hundred mile Hawesville was unlikely to have a role to play in the future.
Taken together the current unexpected ongoing what supply shortages makes the operation uneconomic and so we have decided to permanently close the mill.
We recognize this is difficult news for our team and 100 boss.
Reiterate that this decision is not a reflection on the professionalism and commitment of our employees there.
For two to community over 100 miles.
I want to thank our team and 100 miles for their efforts in the face of extremely challenging industry conditions.
And with that I'll now pass the call over to Robyn.
Thanks, Peter and good morning, everyone.
As you update your models with our Q3 results. There are two factors I want to draw your attention to <unk>.
First in light of the recent unprecedented and steep run up in North American benchmark always see prices I'll remind you of the inherent lag in our realized prices versus the benchmarks during periods of rapidly changing prices.
This lag which cuts both ways of course.
Or is it because of the timing impact of our order files for commodity in value added products as well as the roughly 25% of our North American volume that goes into specialty end uses were negotiated prices don't move up or down with the commodity benchmarks.
And second while we are optimistic about current market indicators. We also recognize that we are now entering the winter construction period when demand typically slows down.
Turning to our dividend you will have seen that our board increased the dividend to 60 cents Canadian per share this quarter on the back of record financial results and continued optimism about end market demand.
This is entirely consistent with our variable dividend policy that gives us the flexibility to adjust the payout level up and down and their operating results outlook and balance sheet permit.
As well as being consistent with our historically balanced approach to capital allocation.
It also recognizes the need for resilience and balance sheet flexibility given the significant uncertainty hanging over our positive outlook, which appeal, what Peter will outline in a moment.
In recognition of our strong Q3, your financial results and our positive outlook. We have returns to our 2020 you ever turned out 2020 capital expenditure is back to the original target of $100 million.
And looking ahead to next year, we have a preliminary 2021 capex budget of $150 million.
We will focus this higher budget on reducing manufacturing costs enhancing process safety across our mills.
Are there investments to support the Companys industrial sales growth strategy.
And continuation of the Chambord revolved.
And with that I will pass the call back to Peter.
Thank you Robin.
We are optimistic about the demand strikes were currently seeing.
But we also recognize there remains considerable uncertainty around to depth and duration of the economic impact of COVID-19 that's.
Yes, Ross or uncertain U.S. election results upcoming Brexit deadline.
We further acknowledge that there is an apparent disconnect between the strong housing economy.
And a weaker macro economy that may eventually got reconciled one way or the other.
We remain vigilant and we'll continue to focus on the health and safety over I'm for use first.
That's right unless our customers needs.
And we will manage the business to be resilient and flexible.
We have learned how to be significantly more agile and scaling our production down and up.
To align with customer demand, while managing costs.
Our new flexible operating configuration is now our standards operating approach.
So sure.
Should conditions change we.
We are well positioned to respond.
And with that we'll jump right into your questions. So I'll turn things over to the operator, who will open up her lines.
Thank you very much if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to ask a question if I apologize.
At the moment to allow everyone an opportunity to signal for questions.
Even now take our first question from Kantar total from BMO capital markets. Please go ahead. Your line is open.
Oh, Thank you I've been wanting a FICO Robyn I'm rats on how well they salt water.
Thank you.
A follow up question I was just curious if you can talk a little bit about sort of all the flights that you are seeing for this time of the Oh, you know obviously through the summer I need to kind of stuff, but you know what I mean, well above solve the complex and have that.
But I'm just curious whether you've been able to go south to catch up with demand.
Well I think there's sort of two things Keith and I would point to first of all you know where your friend George just incredibly strong pricing environment because demand.
Really since may or maybe even earlier, that's been sick recovering significantly faster than we had anticipated.
And even bringing additional capacity on onboards and in August.
Didn't impact that significantly.
The reality.
Freedom I understand that this impacted by seasonal factors.
So we would fully expect.
You know demand to retreat in the winter months and.
And so we're at the beginning of the season and so certainly when I look at our what we're experiencing.
We're now back on time, but our shipments no longer well behind a library, where unfortunately earlier.
Got it that's more than.
Well as you know some of that to maybe two but see the access that market because this time.
Is that fair.
That's a fair fair assessment, though.
Got it that's helpful and then just.
But you know what bull lighten one that's called deal I'm. Just curious you know how that applies a progress that I think last quarter, you said Ah you.
You anybody, Ohio 95 feet, though so you know as we kind of multiple winter and spring of next year.
I'm just she that's kind of how do you anticipate shopping production there.
Well ketone I I guess I want to point back through their commentary I've made earlier.
Yeah, we started at that mill up on a on an emergency basis and temporary basis.
We're able to attract a few of the employees. That's every had to part ways with the previous year.
And and I'm very impressed by hobby team in court deal has handled.
Southern situation.
The other points that I have made in the past is first of all that.
We now consider the middle part of our flexible operating strategy.
And in addition, we have always repeat it.
Only produce what we can sell to our customers.
So that's.
I think you know, we do not make a habit of talking about.
Our.
Our.
In time ahead of schedule sure you'll have true.
Rates until we got to a next quarter <unk> results.
For me to be able to us speak about that specifically.
<unk> is a big focus.
And having a flexible balance sheet and and now a flexible operating configuration. So that we can quickly adapt.
To whatever comes at us that that is very important to us right now and so.
So we are prioritizing just being being a little more cautious.
On that front and while continuing to be balanced in how we allocate capital so you've seen the dividend has.
Has been taken up to 60 cents, which is kind of consistent with the with our range. Since we established the variable dividend policy back in 2013.
And.
And the N.C. I'd be certainly remains a tool in our tool kit and under the right circumstances, we will renew it and we can do so very quickly.
Oh, Robert packs Robin I was done at all a good luck into kind of 21.
I can't agree with them.
Thank you if you find your question has been answered you may remove yourself from the queue by pressing star to our next question comes from Sean to watch with TD Securities. Please go ahead. Your line is open.
Thanks, Good morning, everyone.
Two questions.
Good morning.
Well start with with RASM, there seems to be a lot of short term supply curtailments.
Across the FDIC sector can you give us some context on how your positions.
And any expected cost inflation related to that three the fourth quarter into Q1 next year.
Yeah, I think your your your I figure I can confirm that there's been a force majeure event with one of the key resin suppliers, we have invoked our country's ministry plans going on at this point, we don't expect any material impact on production.
Or Q4 financials, but obviously that always depends on how long do situation for us.
Okay.
And Peter with respect to your comments on.
North American LSB demand.
Wondering if you can provide a little more context on the the repair and remodeling channel and it seems to be a lot of generic discussion around the ongoing demand growth from that channel.
And I'm just trying to gauge it have you seen a pronounced slowdown it feels like there was a lot of volume pulled forward in the initial wake of the pandemic or.
<unk> should we qualify this is a deceleration in year over year growth.
Or.
Are we seeing an apparent peak in volumes going into that channel.
Yeah, Sean I'll try my best around sort out, but I would say that.
You know all throughout this year, we have seen a demand from the channel you know and you know we were shipped its first significant supplier to that channel.
A real stream demand sort of above where it was at the same time last year.
Richard Turner Wells are buffered rush at that time and two on a team.
You know got the volume into the big order in through to our in our segment Olsher how seasonality to it.
Sure it's important to compare it on a year over year basis.
But on that basis, we continue to see significant strength in this segment.
Okay.
Last question for me you need incremental Capex next year, if we exclude chambord spending from 950 million.
Can you give us a little bit more detail on that that specific types of projects for discretionary spending you're looking at.
Robin you touched on class payback expectations any update you can give us on.
What those metrics look like for that type of wandering I'll give you. One example show you know were for our board has just approved a renewal approach project for our gearing.
Belgium dryer.
Yeah, we have a single dryer, there I'm a real intent to replace it with a larger single dryer to.
That plan was originally built into early 2007.
You know it was a it just now we're a dryer limited and show just kind of a project you know I think it's in the neighborhood of 10 million.
I don't know if that's euros or dollars dollar that's about the same I was dollars you know or would take about a year to implement but then how significant uptick and we expect a very good return for that project. So those are the kind of things that we're focused on for next year for two or three bottlenecking, our processes wherever need more volume.
Or focusing on cost reduction projects or a mix improvement show wherever come from further focus on our specialties specialty.
Strategy projects.
Sure.
With respect to the need the de bottlenecking part of that here.
Any guidance you can give us on capacity creep.
Across the portfolio, we should think about.
Well I'm, sorry, I think I tried to make that distinction show <unk> continued demand growth into European business based on substitution.
So that's a place where we're very much focused on debottlenecking to write more capacity available for our customers.
In North America, our focus over the last year or two has been primarily on cost reduction investments and show or efficiency or investments and.
Making more capacity available to our specialty segment.
Understood that's.
That's all I have thanks very much everyone.
Thanks, Sean.
Our next question comes from Hamir Patel from C.I.B.C. capital markets. Please go ahead. Your line is open.
Hi, good morning.
Peter What's you know what do you expect to do with the the press at a 100 mile House.
[laughter] I am here well the one thing I can tell you is that vote be used for <unk> always be production in North America up you know, it's difficult to do but it's not a shot.
You know what your interest covert pandemic.
But.
In Europe for example, wherever you have had all precious to dispose off or.
If earlier I'm sure if I go back about 10 15 years.
We were able to sell some of that trust technology, but more recently in Inverness.
No, we actually have scrapped or two old presses Edward or show real look at what the appropriate or appropriate action as strategic once you know to covert restrictions are a little bit to yourself.
Yeah. Thanks, Peter and you know Canfora recently indicated that they had sold their long idle long I'll pull aboard.
Hi sites and the press there do you see that starting up somewhere else in North America.
I'm not aware of any plans anywhere in North America.
I know that's a very similar.
Press, a wash or to Russia.
They were taken to rush of five or six years ago.
Show, but beyond that I can't comment.
Okay fair enough, but that's all I had I'll turn it over thanks.
Thanks Omar.
Our next question comes from Amgen, a jump up <unk> from Bank of America. Please go ahead. Your line is open.
Hey, good morning, Thanks for taking my questions just quickly on the flexible operating structure and you talked about this a little bit in the past that just want a little wanting to get a little bit more color on how this impacts the overall efficiency at the plants and also from a cost perspective, whether you're able to keeping that was running at a level that's pretty comparable to how did.
I had been under your prior structural.
Yeah, I mean, obviously, but.
But we have learned during this past six or seven months is that youre. Some mills are technically much more capable to tick there's fluctuation in volume than others I'm.
So our focus on this for this flexible strategy is on those mills, particularly.
And Oh.
And as you have seen from us over the last little while you know we have been able to do so.
Without a significant impact on our costs and that's really where our focus has been.
Okay, well thanks for that and then just a quick way to send more I was just wondering if you can remind us sort of some of the factors that will ultimately get you to restart that recognizing its orchard demand focused I just wondered if you could provide a little bit more color on what exactly you could be looking for in the market.
Yeah, John that's a good question U.S., we have repeatedly in the past or whatever it is eight or 10 or 12 quarters.
You know my answer is not significantly different we continue to evaluate.
Demand.
For from our from the market than from our customers, but your focus or particular about the sustainability of that increase in demand.
And so that's really the key for US you know right now we have a very positive outlook for next year, but we have also noticed that there are some significant uncertainties right now that we're still facing.
I'm sure we will closely monitor you know how sustainable refuel a the increase in demand.
Yes.
All right and then my last question before I turn it over a it sounds like some of these investments that you plan on making the 2021 or to help growth within the specialty side of things and I was wondering if you might be able to talk about which end markets are ultimately seeing the strongest growth and.
Yeah, I guess, you expect to remain strong into that year.
Yeah on the specialty side this year as being quite surprising you do I think I have sort of talk through the Pos in very general terms us a furniture commercial construction and transportation.
And your transportation is a bit of a grabel of all sorts of different answers, but that's an area, where we really were caught by surprise. This year up your own particular recreational vehicles, a rich shoes remarkable volume of or B has been a big growth Mark market. This year and I guess that was one of these.
Packs or unanticipated impact so if the covert crisis.
Since people can no longer where it's much more difficult to go on vacations or abroad, or maybe choose not to go on a cruise anymore.
A lot more in North Americans have chosen to buy a RV and.
Or joining the RV vacation crowd, so, but that's a good example of wherever you have seen some significant and unexpected growth.
Thank you.
Thanks, John.
Our next question comes from Paul Quinn with RBC capital markets. Please go ahead. Your line is open.
Yeah. Thanks good.
Good morning slots afternoon, I guess I'm, just pulling up a question on 100 <unk> in a yeah recognize that with it a difficult decision. It's I suppresses era equipment that you can sell this year and their associated 10 year. They also sell.
No there's not much to most of the there was no what is of course good.
Good morning, first of all Oh, sorry, [laughter]. There is no I think in British Columbia at school, it's a tree license.
That long term tenure, we did not have any that was associated with a mill.
Ah. So it was all short term tender primarily focused on the beetle killed wood.
And in terms of equipment.
People, obviously are reveal pull out whatever equipment, we can use with our other operations if it's still in good shape.
And you know with the press I've already mentioned that earlier, but that's sort of our perspective, there appeal to the mill has to be put away very carefully when we originally closed down and Regal.
So obviously, therefore have equipment that can be used to elsewhere in our operations.
Okay, Thats fair and then I guess on the <unk> question, you see no material impact, but have you seen a nice which ER and you got adequate India supplies were after you had.
I had a number of mills that are running should all like that ever send out.
You know we have I said, we have a invoked our contingency plan are implemented our contingency plan.
Peter we've worked very closely with our M.D.I. supplier and.
And no different for extremely responses during this difficult time.
Oh, I should say that our European mills oversee our supply from a different source.
And there should be no issues, there and in North America, we have had enough flexibility to.
Were you able to sort of react to a this temporary or demand or temporary challenge and oversee that may change. If it's temporary becomes a significantly longer done well the year suppliers currently indicating that develops.
Okay, and then just lastly earlier this week when here, let's see competitors mentioned that they expect goes beep grades in Q4 to be higher than Q3 is that is that your it looks as though.
Well I mean, obviously just starts to the quarter has been extraordinary from a pricing perspective.
Uh huh.
It's just a furlough too so I don't even know what words years on anymore in terms of what we've seen with pricing.
You know at the same time as I mentioned earlier.
We are growing and tutor weaker demand pure it's seasonally periods of the year and I'm sure with that I would expect that you know doors kinda prices won't sustain at these levels through the end of the year again I'm no not good at prognostication, but that's a that would be I think its a reasonable.
I'm sure.
And so then the question is just okay, how how real things.
[laughter].
[laughter].
Well there are some <unk> Oh sure if that's okay.
Okay can you still hear me.
[laughter].
Oh, it's maybe on your side, Okay anyways so.
It is possible on the averages are run everything ever just housekeeping effect, that's normally in a a downward markets regain a little bits and mill not realize they shouldn't compare to the steep [laughter] beyond thoughts you know I am I think that this re do not like to.
To give forward guidance when it comes through results or pricing.
You know and so [noise].
I think all I can say, yeah, I would just echo that we in fact, we do not give guidance for obvious reasons.
Yeah.
[laughter] already yeah, well I mean, we're not being tapped here under the table.
Got it my Shin source or [laughter] shut so thanks for let say [laughter].
Thanks, Paul.
Our next question comes from Mark Weintraub with Seaport Global. Please go ahead. Your line is open.
Thank you and maybe following up on Paul's question, and recognizing that you don't give guidance could you share with us where oh, let's see prices youre outbreak LSB prices in North America quarter to date have been relative to the third quarter and roughly what percentage of the volume.
Well I would be encompassed in that would would that be booked for the fourth quarter.
Yeah, Hi, Mark no I I cannot share anything from the fourth quarter and for the same reason, we just we don't we don't give guidance nor do we disclose anything outside of our corner. So I just can't just can't go there.
You can see what's happened with benchmark prices, obviously and you have a sense that for you know for for how we stack <unk>, where volume goes right about 75% of our North American volume is tied to is tied in one way or another she does random links spaces in that 25% about volume that goes into the industrial and export uses it.
De linked from that was so I'm not.
That's that's still applies.
Okay, and then just like I was just asking for.
What's already happened as opposed to what's going to happen in terms of the pricing, but I. If you understood that fine I can move on I I did I understand that yeah, I can't I still can't go there [laughter] fair enough.
Then second in Europe noticeably the price was pretty flat for the third quarter versus second quarter I'm very much different than what we saw in the U.S. can you just remind us how pricing tends to work in Europe.
From a framework.
Well, it's a good question I mean pricing in Europe.
In general.
It's negotiated as first of all so there is no sort of commodity benchmark.
Secondly, they tend to vary in a range of about 20%.
From top to bottom.
And it usually takes several years to go from one extreme to the other extreme.
Ah you know from the numbers that we do publish which are a particular greater forward to be in the German markets. You can see that you know prices have come from off from their recent peaks over the last year or so and have now flattened out.
You know demand and particular substitution demand in Europe has really gained strength during.
During just grow over a period because people have become increasingly aware of to risk associated with being at the far end of a very long supply chain.
And are increasingly focusing on buying from domestically produced or would it be.
And recognizing you don't give forward guidance, if I think about the demand getting better.
And despite having come and all else equal it would.
Lead me to think that there would be positive bias going forward I.
Assuming.
No big shift in demand trajectory are there any other variables that I shouldn't be weighing heavily as I make my judgment.
No I think you know other than the the overall risk on your assessment of how important that overall risk, but we have indicated is you know I think.
Oh about this those are the key elements.
Okay, two real quick ones to inventory in the channel in particularly in North America, where would you say.
Oh lets be inventories are relative to where they typically would be this time of year.
Oh for just time of the year. They have now should have I think as best as I can judge it based on comments that we receive from our customers you know we as best as we can judge it inventory situation is now more normal to what three which you just time of the year and.
And of course, a lot of it depends on how long are.
Demand continues into the winter Oh, it's always difficult to predict when a when that seasonal seasonality really kicks in.
But.
But that's a well other than that.
I would say we are probably back in line to where it would typically be.
Great and one last one on the dividend. So you increased 10 at recognizing it's a variable dividend you increased it.
And it seems like it that the dividend until things what would change is that the way to read it now and door what would be that kind of the thinking to have increased the the base variable dividend as opposed to having done a special dividend given the extraordinary mark.
Instead, we have been and just kind of your thought process would be helpful.
Yeah, Mark I mean, ultimately obviously dividends are a board decision, but the.
The 60% level is consistent with our with our range and the track record that we've established and you know obviously, we it's a decision in a discussion that happens every quarter. So I again can you I can't tell you. They will stay there next quarter it may or may not but you know you heard us say.
Hey, our outlook is positive, but there are you know there's a much more significant level of uncertainty hanging over that outlook and then we would typically see in a cycle and for that reason, we're focused on both corporate and balance sheet flexibility and also operating flexibility and that will continue to be you know that we'll continue to guidance going forward.
All right good thank you.
Thanks Mark.
Our next question comes from and Smokeless Cook with credit Suisse.
Please go ahead your line is open.
Thank you good morning, I think the first question is for Robyn and that's just on the MIT and the 43 million of savings year to date, which is an impressive number given all that's happened this year.
And I guess, when we look ahead and you're no longer in a flexible operating strategy as you've been running and some of the plants.
Do you see the cost structure that you've managed to have.
Bob this year and really benefit from that going to be sustainable as you're really ramp up productions and check what the margins you can become better.
Yeah. It's a good question, Andrew and yes. Our view is that you know that the bulk of that is sustainable you know it's been one of our big learnings silver linings, if you will coming out of Cove. It is.
He is quickly learning how to how to be more flexible with their operating configuration in a way that still contains our manufacturing cost.
So I think you heard us talk last quarter about your trading off downtime for lower maintenance cost, where you know where that trade off make sense and that's and that's a big part of it. So I think the majority of it is sustainable.
But if they're there has certainly not only includes controllables to be clear our am IP and includes just the controllable elements of our cost structure and we have had a tailwind on the uncontrollable aside from lower resin prices. So far this year.
But so if you look at Controllables I would I would expect you know that part of it to be sustainable based on what we can see in how we've learned to be a to be flexible and container costs.
Okay. Thank you that's very positive and then I think on the last call you talked a little bit about.
Some hiring its just you Hobbs and then as a cordell.
That's what the profit showed that you've got with your employees just retaining.
Employees, especially in the environment, we're in and she got difficult drawing new employees and I guess that the challenge is really on the skilled side, but with the profit share that it looks like your post this year I would think you wouldn't really have any hiring issues can you talk a little bit about just hiring of attention.
Yeah sure Andrew I think what you're referring to is a to challenge a re re mention Toronto.
[noise], taking to people back who in in our Kirker do a line one startup or emergency startup that we had in early August.
Remember guidance that you know I think in 2019, we had to part ways with about 47 of our employer use one we shut up lying down most of those I'm for you said font auto jobs nearby.
Nearby or because of the late.
2019 to house, the employment market, we're still extremely tight.
Sure when we.
Needed to make the decision to startups line backup on a very quick racist or in early August Oh, we anticipate at some difficulty getting all of those people back and that's indeed be indication or their fraud or a jobs and.
And we're a reluctance to give doors up to come back to work for us.
Show, having shut that you're right [noise].
I would say that the mill has responded extremely well and was able to do quite well even without a limited number of employees.
During the during that period.
Overall, you're absolutely right you know our.
Retention of employees has been extremely good Oh, we have very limited turnover in most of our operations.
And profit shares a long term part of touch strategy and I think at this year or two everybody's surprise will be a very good year right now and I'm sure. There's no surprise anymore, but it certainly would have been in April.
Oh profit churn numbers will be very attractive.
Okay. That's great. Thank you very much.
Thanks, Andrew.
Okay.
Thank you everyone as always Robin Heather and Robert and I are available to respond to any further questions you may have.
Well. Thank you for your participation today I hope you all stay safe and we look forward to reporting on our progress next quarter.
That sandro handed back to you.
Thank you very much. This concludes todays call. Thank you for your participation you may now disconnect.
[music].