Q4 2020 Icl Group Ltd Earnings Call
Okay.
Yeah.
Ladies and gentlemen, thank you for standing by and welcome to the ICL Analyst Conference call.
The presentation today will be followed by a question and answer session of which time. If you wish to ask a question you will need to press star one on your telephone.
Must advise you that this call is being recorded today.
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Like to hand, the call over to the first speak each day, Peggy Reilly Tharp, Vice President of Global Investor Relations. Please go ahead maam.
Thank you Hello, everyone I'm, Peggy Reilly Tharp, Vice President of Global Investor Relations for ICL I'd like to welcome you and thank you for joining us today for our fourth quarter 2020 conference call.
The event is being webcast live on our website at ICL dashed group dotcom.
Earlier today, we filed our reports with the securities authorities and the stock exchanges in the U S and Israel.
Those reports as well as the press release are available on our website.
There will be a replay of the webcast available a few hours after the meeting and the transcript will be available shortly thereafter.
The presentation, which will be reviewed today was also filed with the securities authorities and is available on our website. Please be sure to read the disclaimer on slide two.
Our comments today will contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These statements are based on management's current expectations and are not guarantees of future performance. The company undertakes no obligation to update any information discussed on this call at any time.
We will begin with the presentation by our CEO Mr revenue Zoller, followed by Mr. Coffee Altman our CFO.
Following the presentation, we will open the line for the Q&A session of he.
Please thank you Peggy and welcome everyone.
The research in 2020 was an unusual and challenging year for everyone.
While the second and third quarters of this year were impacted by COVID-19, we ended the year with strong fourth quarter results.
For the fourth quarter consolidated sales rebounded back to the first quarter levels and came in at $1 $3 billion, an increase of 19% year over year.
Adjusted operating income of $143 million exceeded first quarter results and was up more than 60 per cent year over year.
All divisions contributed to the strong quarter as these significantly improved results were achieved despite the negative impact from lower commodity prices and COVID-19.
In.
<unk> adjusted EBITDA of $268 million was up more than 30% year over year in the fourth quarter.
For the full year, adjusted EBITDA was nearly $1 billion and down 17% versus 2019.
On slide three we included some highlights for each division, including the following.
Industrial products delivered record fourth quarter operating income of $80 million up 33% year over year and reflective of continued the strategic shift to long term contracts and as the effect of COVID-19 began to wane from most end markets.
The potash Division reported both sales and operating income growth up to an 82%, respectively and delivered record fourth quarter annual production.
Increased production of the dead sea as compared to the fourth quarter of last year, when we shut down production for three weeks from the facilities upgrade.
The increase managed to more than offset reduced production from Spain due to the accelerated closure of the beautiful <unk> mine and the production shortfall of poly sulfate as a result of the power outage at both the U K in November.
Phosphate solutions saw a significant increase in fourth quarter operating income up $20 million year over year with both specialties N Y P H delivering record operating income.
Innovative AG solutions sales were up 9% year over year with specialty agriculture, and turf and ornamental both showing double digit improvement.
Operating income turned positive in the fourth quarter coming in at $5 million.
In addition, just after the new year, we closed on our acquisition of fertile Aqua in Brazil, and increased our exposure to the world's fastest growing agriculture market.
If you'll turn to slide four you can see our key consolidated financial metrics over the past five quarters and the improvement as 'twenty 'twenty progressed.
The fourth quarter was clearly a strong finish to a tough year and we're coming out well positioned for 'twenty 'twenty, one with commodity prices in our favor.
Before we move on I'd like to highlight our healthy operating cash flow on slide five for.
For the fourth quarter, it was up approximately 22% year over year.
We also saw a nice strength in free cash flow for both of the quarter end of year and despite unexpected cost challenges related to COVID-19.
On slide six we have our industrial products overview, where we saw record sales and operating income in the fourth quarter with growth of 15 and 33% respectively.
This also kept our second best year ever and industrial products, we reported EBITDA of $103 million up more than the 30% year over year.
During the quarter, we saw a recovery from COVID-19 pressure in some end markets such as consumer electronics components and construction and these drove sales of bromine and phosphorus based flame retardants.
Unfortunately, the automotive and oil and gas end markets are still weak.
Well automotive is starting to show signs of recovery, which should benefit certain brominated flame retardants, we do not expect oil and gas explorations to recover quickly.
This will continue to negatively impact sales of clear brine fluids in 2021.
In addition to the end market recovery. We also continue to benefit from our strategic shift to long term versus spot agreements.
Part of the strategy includes the additional T V. P. A capacity we added at our plant in note 12 of where production trials began during the fourth quarter the.
This new capacity is already sold out for most of the 'twenty 'twenty one.
In the fourth quarter, we saw improvement across all product categories, excluding clear brine fluids and I would like the specifically mentioned, our magnesium and calcium products, where we saw a higher fourth quarter sales and delivered record 'twenty 'twenty sales and operating income.
The improvement was due to increased demand from the pharmaceutical and supplements and markets and higher selling prices.
We expect both trends to continue into 'twenty 'twenty one.
I'm also proud to share with you that in ICL ingredient is included in the vaccine for COVID-19 that has been approved by the FDA for use around the globe.
While the contribution to our results is still not very significant we are proud of our small part in the efforts to mitigate the virus.
Finally, the year ended with elemental bromine prices hitting a 12 month high in China, putting industrial products and a good start position for 'twenty and 'twenty one.
On slide seven we have an overview of our put out of operations.
We saw year over year improvement in both sales and operating income up 25 in the 82% respectively in the fourth quarter.
EBITDA also improved and increased nearly 40% to $83 million.
In terms of pricing momentum there was an improvement in market conditions, especially grain prices in the fourth quarter.
Our average realized price per ton for put out was up 4% on a quarterly sequential basis, but still down 17% year over year.
Pricing continued to improve considerably into the new year.
Looking to 'twenty 'twenty, one I'm sure all of you have already read or heard the V. P. C in Belarus and IPO in India have settled the first Indian potash contract for 'twenty and 'twenty, one at a rate of $17 higher year over year.
Prices remain on the positive trajectory in all markets.
Turning to production, where as I mentioned earlier, we set a production record at the dead Sea not only in the fourth quarter, but also for the full year, reaching $3 96 million tons.
These records helped offset the lower production in Spain related to the accelerated closure of our fuel from some line, which was originally scheduled for 'twenty and 'twenty one.
As a reminder, the optimization of our mining operations in Spain will help us improve our cost per tonne and we expect to be at an annual run rate of 1 million tons by the end of 'twenty 'twenty one at ICL Iberia.
However production in Spain in the first half of 'twenty 'twenty, one will be impacted by the final integration efforts of the ramp project.
For the full year, our bogie facility in the U K had record production of put out plus and poly sulfate are one of a kind of organic fertilizer.
Our put US division achieved all of these records despite shutdowns and delays related to COVID-19, and also delivered approximately $30 million in recurring cost savings and efficiencies for the year.
Now turning to slide eight where we have an overview of our phosphate solutions division.
Fourth quarter sales were up $84 million year over year with operating income up $20 million, a significant increase with improvements in commodities and record operating income from specialties.
EBITDA was up more than 65% coming in at $75 million.
While we saw improvement in the fourth quarter from sales of food grade phosphates salts white phosphoric acid and dairy proteins. We also saw contribution from some of our innovative new products, such as alternative proteins and scratch ex among others.
The phosphate fertilizers also saw sales growth in the quarter, despite seasonality due to higher sales volumes.
One of our phosphate solutions division suffered from record low commodity prices for most of the 'twenty 'twenty. This trend started to turn around in the third quarter and continued to improve in the fourth quarter, leaving us well positioned for 2021.
Not to be out done by of put US Division phosphate solutions also delivered production records eight in total for the year and spanning the globe from Israel to Brazil, and onto Australia, Germany and China.
I would like to turn your attention now to slide nine and an update on innovative AG solutions for.
For the fourth quarter, we saw a 9% increase in sales and a shift positive adjusted operating income despite seasonality and the strong fourth quarter helped drive annual operating income growth of more than 90%.
EBITDA of $11 million for the quarter showed exceptional improvement year over year.
This division is benefited from our repositioning and is delivering results with successful new product launches in the fourth quarter cost efficiencies lower raw material costs higher sales volume and favorable exchange rates also contributed to the improvement.
Specialty agriculture experienced strong demand across all regions, while our turf and ornamental business bounced back from of COVID-19 decline earlier in the year with growth in Europe, North America, Australia, and New Zealand.
With positive momentum and a strong AG cycle predicted for 'twenty and 'twenty, one as well as new presence in Brazil, we expect to see additional significant growth from this business going forward.
I would like to begin to wrap up my portion of today's call with slide 10, which highlights some of 20 Twenty's key events.
These events span the entire year, beginning with the acquisition of growers back in February and capped by the acquisition of fertile Aqua, which was announced in October and closed during the first week of January.
We added growers and innovative in process and data driven farming to our family to help enhance our digital service offerings and accelerate our market reach.
For the Lockwood is another very exciting acquisition, which helps us expand our presence in Brazil, one of the world's fastest growing agriculture markets.
The addition of fertile Aqua gives ICL of significant foothold in a major market with rapidly increasing demand for specialty plant nutrition products and also provides the seasonal sales balance between the northern and southern hemispheres.
Going forward, we expect to continue to grow in the specialty fertilizers market and to expand our reach in Brazil via both M&A and organic growth.
In order to get the most out of our commodity specialty agriculture, and turf and ornamental fertilizers, we consolidated our crop nutrition sales and marketing efforts in 2020.
This integration is already driving internal synergies optimizing our sales and marketing channels, and allowing us to leverage our market knowledge product development of capabilities logistics and production assets across all of our agriculture related businesses.
Other key Twenty-twenty achievements included several production related initiatives.
I've already mentioned the record production at the Dead Sea, which followed an investment in facilities upgrades in the fourth quarter of 2019.
We also extended our T b b a production of notable above and ramped up production of white phosphoric acid at our white P. H joint venture in China.
[noise] White P. H had a great year with record operating income.
Not only did our team continued to shift from commodity the specialty offerings, but they also executed successful cost reduction initiatives.
We also gained efficiencies that our ICL Iberia in rocklin facilities as you know, we discontinued unprofitable phosphate rock sales and saved costs across multiple areas, including labor raw materials energy maintenance among others.
In Spain, we accelerated the closure of our village from this mine and began the work to connect our cabin as this mine with our theory of plants.
Despite of COVID-19 related delay the ramp is nearly completed and operations are expected to commence in the first half of 'twenty 'twenty one.
Moving on we maintained our solid capital structure, which I know koby will address in his comments.
We continue to focus on our ESG efforts and were once again listed in a number of prestigious rankings, including the Bloomberg ESG index and the Bloomberg Twenty-twenty gender equality index, which we joined the once again in 'twenty 'twenty one.
We were also included in the FTSE for good Index series, the MA low ranking for corporate responsibility and the carbon disclosure project.
In addition, I still Iberia was certified as the first sustainable European underground mining company by the Spanish Standardization of association in the fourth quarter.
Before I turn the call over to Koby I'd like to share a few final thoughts from slide 11.
Out of the adversity of 'twenty 'twenty came strength.
We are seeing good momentum with all divisions contributing to fourth quarter sales and operating income growth.
We're starting 'twenty 'twenty, one on solid footing and expect the worst of COVID-19 to be behind us and for commodity prices to continue to rally in the upcoming months.
The strategic actions, we've taken have helped to set the stage for the new year.
In addition, we intend to continue to innovate in 'twenty 'twenty one.
Last year, we added approximately $40 million run rate of operating income, which was directly related to our new internal innovation program.
This year I plan to share more about our innovation efforts and successes during our quarterly earnings calls.
I would like to wrap up the challenging year with words of thanks for our employees.
Every day their efforts helped make ICL of the company. It is.
This year the triumphed over so many obstacles and help the company to persevere and for this I must thank them.
And with that I'd like to turn the call over to Tobi.
Thank you Avi and good day, everyone. After a good start to 2020, we like many others. So downturns in the second and third quarters due to the impact from COVID-19.
We want to maximize customer service and production, while simultaneously focusing on the health and safety of our employees.
The other businesses, we got growth initiated savings Paul guns, and reevaluated, our capex spend.
Unlike other businesses. We were also hampered by low commodity prices. However, one of our third quarter call. We were able to point the signs of a recovery.
Some of our financial highlights for 2020 on slide 13 is low.
We've just discussed we maintain our strong financial and ended the year with therefore, the liquidity on hand for 'twenty 'twenty one growth opportunities.
We delivered solid operating cash flow of $804 million in 2020 and.
And free cash flow of $188 million.
All in the meaningful fit pandemic.
Our net debt to EBITDA ratio of two five times.
Remains in the low end of our targeted range and during the year, we leveraged the attractive market conditions and extended more than 200 million dollar of short term debt bust 2030.
We now have over a third of all of our net debt with maturities beyond 'twenty third.
Turning to slide 14, you can see the commodity pricing momentum.
Scott in the third quarter has continued into the fall of water in January of 'twenty 'twenty, one of the mindful fertilizers, the hilli regroup with both potash and phosphate showing significant increases.
In the second half of 'twenty 'twenty four glad we saw good demand related to increased grain prices and concerns over the food security in the.
Sure.
We've already mentioned elemental bromine prices of improving.
So the need for users have decreased their supply significantly over the past few years.
So what we saw is depletion inquiries of environmental related regulatory pressure and the reduced availability of land available for bromine production.
Turning to slide 15.
You can see the impact of lower commodity prices head or fourth quarter of sales and profitability theme, we gained ground in the quarter and full sales improved nearly 20%.
Here.
While the quantities, where the up with growth across all four of our divisions you can still see the impact of low commodity prices.
This is even more apparent when you look at our adjusted EBITDA for the fourth quarter, However, improved quantities Costco to us and all of material prices helped offset lower commodity prices. Unfortunately, we were also negatively impacted by exchange rates and the U S dollar of.
Weekend.
It appears that this will continue into 'twenty and 'twenty, one and the impact our operating and financing expenses once again on.
On Slide 16, you can see the same detail for the full year.
We were unable to fully offset the bottom of the commodity spike as prices and sales came in 4% lower year over the year.
Our profitability was also negatively impacted by low commodity prices. However, we still managed to deliver nearly $1 billion of adjusted EBITDA in the middle of the pandemic.
To help with your some of the parts calculation. We've provided the breakdown of annual adjusted EBITDA by the vision and additional detail around our phosphate solutions business.
This includes our specialty contribution to consolidated adjusted EBITDA of $171 million and commodity contribution of 104 million of.
We believe the trend in the fourth quarter bodes well for 2021 and remain convinced that's one of our business is falling and Ken at times. The complex. It is also robust and varied.
All of the diversity helped off the weather the storm of 'twenty 'twenty and we will continue to benefit us in 'twenty and 'twenty one.
So wrap up I would like to turn to slide 17, and remind you of some of the areas we focused on during our Investor day.
Foundation of the will remain a company with unique of at strategic locations and decades of Knowhow.
The pandemic cannot sweep away, we remain focused on leading our growth our three many of our value chain and in our ESG efforts.
This might be alone.
As I described our focus on innovation will already be intensified going forward and we intend to maximize our product processes and our people, especially the ideas as we move ahead of.
Finally, we will continue to maintain a strong balance sheet and the solid capital allocation approach.
So we have the flexibility we need to opportunistically grow both organically and through M&A and of course.
We will maintain all of the industry leading dividend policy.
Finally, you can see all of the adjusted EBITDA guidance for 2021, which we are issuing to provide better clarity and also expectations for the of we expect our adjusted EBITDA for 2021 to be between the range of $1.0 billion to $1 billion.
The two 1.12 billion dollar, which is based on prices and exchange rates as of the beginning of 'twenty and 'twenty one we.
We expect the power of financial results will improve as the info aggressive however.
As a reminder, we are coming up on some record achievements in the first quarter.
Of 2020 spin.
Specifically, we delivered organic all of the industrial products performance, including record sales of clear brine fluids and had record potash production at the dead Sea in the first quarter of last year.
For this year, we will also be seeing the production stoppage in Spain. During the first half as we complete our consolidation worked there. In addition, we expect to see impact from exchange rate in 'twenty 'twenty, one if COVID-19 quote there trends continue while the intensified.
With that I will turn the call over to the operator for Q&A.
Okay.
Thank you ladies and gentlemen, we will now begin the question and answer session.
I'd like to ask a question. Please press star and one on your telephone and wait for your name to be announced and if you'd like to cancel your request you compress the husky.
And one on your telephone to ask a question. Please standby, while we compile the Q&A queue. This will take a few moments.
Your first question today comes from the line of Joel Jackson from BMO capital markets. Please go ahead.
Hi, good morning, where the Tobey.
Three questions I'll ask them one at a time can.
Can you give a little clarity about what you expect potash production to be in 2021 and 2022 the lot of moving parts as you bring back on Spain higher operating rates, but you've got some outages in Q1 are the <unk>.
The engine work then you can expand it and you've got record production of the <unk>. So what do you expect will be production of 21 and production of 22. Thank you.
Thanks, Joe.
The production and Saddam the dead Sea will be between 3.924 million tons. This year and in Spain, 700 to 800000 tons.
Depending on the degree of success of the consolidation which is expected.
To be finalized either in the March or in April.
The next year after that and so we intend to exit the.
In Spain, the 'twenty 'twenty, one and a run rate of a million tons. It means we'll be close to 5 million tons of year in 'twenty and 'twenty two.
Okay. That's helpful.
Sticking with potash so a lot of your competitors.
We are outraged about how low the prices are in India per unit with China.
You have a lot of Chinese sales I assume you'll be going in at the same benchmark price matching the price there with your buyers and can you also comment on the bifurcation, we're seeing between standard Asian potash markets and granular markets in the Americas.
Absolutely you know the change the the change in the prices has really been overwhelming.
And the if you saw on one of the slides with the Kobe presented you saw the spike in commodity price is actually not just put ash in December and of course. It continued in January so as we were creating a guidance for the year. What we saw in front of us was basically.
The Indian contract.
And we assumed at the time of course, it changed Tonight, we assumed at the time that the Chinese contract would the would be signed at the 10 year at the at a 10 dollar discount like it usually is.
At the same time, we also saw in average price and average sale price of about 270 Bucks for granular potash in the in the U S. In January of.
270 is the equivalent for us to about 250 standard so it's not so different from the 247.
So that's the that's pretty much the those of the inputs that we had but again as we speak I'm. The last sales we made in the U S. I think the last one was of $303 that was just a you know a.
Couple of days ago, and the prices still seem to be spiking up.
Nutrient came out with a with an announcement in the prices in Brazil are going up by the day.
So it'll be interesting to see how things developed we're in no rush to sign contracts obviously.
About a 35 per cent of our sales go to China.
China, and India, and the Theyre very strategic customers for us.
At the same time were already sold out until the end of April.
And.
We'd like to see more clarity about what some of the larger suppliers of doing so.
We're sort of looking at things and trying to optimize our position and we'll be waiting for additional information and of course, because this a very rapid development in the recent months in the half or so.
We'll be in better position to give a better projection going forward and a couple of months.
That answers.
You got some of my last question would be on Y th. So on China all of them, you're talking about how the capacity I believe without the new capital I think in the past you've said no.
No new capital in that project that are coming with the new plan and all of its the same plan just further along now.
Oh, the the the joint venture has been a self sustaining in terms of capital for the past the almost two years.
Actually it's a it's been returning shareholder loans quite significant amounts in the past year and a half of.
It's profitable cash flow positive 30.
$30 million of the operating income this year, which were a record third year in a row of.
The record results and the given that the wiped the H what the the white the aged AR plant the white P. A plant is ramping up very nicely.
We think that there are good chances of we'll see even better results in 'twenty 'twenty one.
Thank you.
Thank you.
Thank you. Your next question is from the line of Tom Breakfasts West from Citi. Please go ahead.
But the used car T. Thanks for the opportunity to ask questions.
Just wanted to unpack the very strong performance in industrial products.
As you bridge shows there's very little on price.
In the fourth quarter is that something youll now expecting to capture and just on that you've obviously talked about and you about contracts shift of contract well about half of annual pricing. The sets at some point of little color around around contracts would be good I'm, sorry, lastly on industrial products Oxy.
Substantial jumped in club T's.
Is that of a stocking effect do you think the noticing obviously the things in.
The limited clear brine fluids I'll come back from Mike. My question is on the second topic.
Okay. So there are a few parts to your question.
First of all of try to describe the dynamics in the market. We saw a demand softening during the second and third quarter of May.
Mainly electronics automotive.
And some.
The somewhat in construction.
Mainly in the flame retardants market and obviously, our clear brine fluids I'm, a very a very significant decline in demand.
We are our strategy is the value over volume and the even though it was attempting to sell more of the lower price.
We felt that the there was some panic and some stocking on the other side and the end result was the we remained firm on pricing.
A lot of our business now is in the long term contracts, adding compounds.
And what happened is that the late in the third quarter, we saw a significant recovery.
And in the fourth quarter, we even were surprised by the level of recovery.
The completely back to normal.
Other than the automotive in clear brine fluids.
Given that the bromine prices went.
When went up as quick as they went down and even faster that actually created some difficulties for some of the producers in China, because they were buying a bromine at a very high price and the the production of a of bromine compounds of became.
Less economical and that actually drove more business our way.
We are completed the new T V. B, a plant late last year and because of our long term relationships and because of the new business that we attracted in because of the firming of the market. What ended up happening is that the where virtually sold out for the year.
Our new T V. A plant, although we thought it would take about 18 months to get to that level and we're basically sold out on most flame retardants for the first half of the year and demand the.
It looks very very strong and promising.
Clear brine fluids, obviously is not at the same level that it was in the at the beginning of last year or anywhere near our 2019, we expect that to continue all in all and.
The bromine compounds.
The.
Went down only by 3% last year.
By the difficult second and third quarters, and we're starting this year with the new capacity and the additional contracts.
So we expect the very good year in the compounds and the now the question is will it be enough to overcome the.
The the smaller quantity, perhaps of the clear brine fluids.
Right now that the beginning of the year was the very positive so.
We feel good about it in terms of the pricing given that the level of bromine prices were relatively high in December and January of.
Most of our renewing contracts actually all of them were renewed at higher prices than the year before.
So we're good on the pricing side as well I hope that gives you a good picture.
No. That's that's very helpful color.
And then secondly on phosphate solutions, obviously, you noted the strong.
The recovery I won't kind of performance of the of the specialties business.
Yes the.
If we think about the margin profit.
Four months.
You know the fourth of course will be very seasonally affected so you know.
What should we be thinking about the kind of the underlying margin.
Given that strong fourth quarter as we look forward into 2021.
Do you get to the back to kind of 5% plus.
Tight margins for this division in 2021.
Well the plan the plan, we presented for 2025 with the growing our organic margin to double digits by 2025 and at the same time acquiring new business that is the over double digits. So we acquired the double digit operating income and EBITDA business in Brazil.
Jill that will add to our growing business with the growing margin in our existing business. So on our existing business you could expect the.
Slight increase in margin during 'twenty 'twenty, one, but given the new acquisition it'll be a little more.
Okay.
Very helpful.
Thank you.
Thank you.
Thank you. The next question is from the line of Mark Connelly from Stephens. Please go ahead.
Thank you.
Start with.
The nice jump in pulp production.
Have you seen any significant shift in where you're selling your pulp beyond the usual timing and seasonality of stuff and has there been any significant shift in where your best net backs are.
I apologize, but the where you're talking about potash, yes, I'm, sorry, I'm punished.
Okay, I couldn't hear very well.
Like like I said I are our four major markets, which account for about three quarters of our sales are a China, India Europe, and Brazil are the only change in that is that there was some shift during our December and January.
<unk> now February to the U S.
Given that the price levels in the U S of spike more than in other places.
So we shifted some of our some of our.
I would say traditional sales that would've gone to Brazil to to the U S.
Other than that not the.
No major changes.
Okay. That's super helpful and second you had the net kind of the net the.
Sorry, I apologize the net backs are pretty pretty similar as of January now, they're a little more from the U S. As I said because of the spike of typically net backs from China are a little lower than.
In India.
The mainly because of the 10 $10 price differential the typically exists from the small transportation difference, but the most net backs are usually.
Relatively a close.
Okay Super helpful and just you didn't call out of automotive weakness this quarter, but we know that several of them. All the producers are struggling is that can have any impact on your demand in the first half.
In fact, two ex sorry.
Yeah automotive flame Retardants haven't returned two of.
The the levels before COVID-19, but the we spoke with the some analysts in the U S and they're telling us of the there's actually a boom in the automotive industry now in Israel and the sales of new cars broker of record and in December.
And the explain that the because people are.
Don't want of travel and public transportation. They are willing to live further away from their workplace and also their leisure traveling.
Is much more significantly by car because of our the situation with our with the flights.
So our all in all they expect the recovery, we're seeing a little bit of a recovery I think again because of stocking maybe it'll take some more time.
That's the that's the best information I guess that I can give at this point.
Super helpful. Thank you.
Thank you. The next question is from the line of Alexander <unk> from Bank of America. Please go ahead.
Great. Thank you for the opportunity to ask questions that two of my email of some of them. One by one of the first one is on the thoughts of lot acquisition.
Whether you can give us the little bit of color around sort of how.
How it's coming out of being part of the company from a month in your kind of plans for the business. This year as you are getting the opportunity to integrate them.
We're very happy with the the management team at fertile Aqua, they've only been with us for one month, the they're on budget for the first line.
Looking are looking positive.
That's about as much as I can say at this point are you know whats the new acquisition, we're taking it the.
We're taking it very carefully it's our first the acquisition in Brazil.
But we have you know.
Great Trust and the management team and they're very focused.
Focused.
We're looking at the some of the synergies that.
We plan to execute them on all looks positive.
Great. Thanks, and then maybe a broader one on the M&A plans and then could you give us the.
So how that pipeline is developing and where the.
Sort of the the rally in crop prices and generally a sentiment in the AG space changes the the easel difficulty with which you can get your hands on assets. Thank you.
I I would say that we have a we have of pipeline.
So there's not a lot I can share at this point other than the fact that a healthy balance sheet with plenty of liquidity came came in handy. During COVID-19 were opportunities that we didn't imagine could open to us are open to us.
The whenever we will be able to share the news and of course, we will again, our focus on acquisitions as an.
Specialty fertilizer space.
Special focus on Brazil, and and food technology as well.
Alright, thank you.
Thank you there are no further questions at this time, so I'll hand back to the speakers.
We'd like to thank you for joining us today, and we look forward to talking with you later this year when we report our first quarter results. Thank you.
Okay.
Thank you that does conclude the conference for today. Thank you for participating and you may now disconnect.
Okay.
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