Q4 2020 Ituran Location and Control Ltd Earnings Call
Good day.
Okay.
[music].
Ladies and gentlemen, thank you for standing by welcome to the <unk> fourth quarter and full year 2020 results conference call.
All participants are at present in listen only mode.
Following management's formal presentation instructions will be given for the question and answer session.
For operator assistance during the conference Please press Star Zero.
As a reminder, this conference is being recorded.
You should have all received by now of the Companys press release, if you have not received it. Please contact <unk>, who runs investor relations team at GK Investor and public relations at one six for 66883559 or view it in the news section of.
Of the company's website at Www dot each run Bastille day L. I.
I'll now hand over the call to Mr. Ehud Helft.
G K Investor Relations Mr. Hal would you like to begin please.
Yeah. Thank you operator, and good day to all of you and welcome to each one of these conference calls to discuss the fourth quarter and for years 2020 of results.
I would like to thank you too on the management for hosting this conference call.
With me today on the call.
Can I also ask you to seal instead of what do you mean, the dip CTO and VP of finance.
Eddie come on the CFO for each of them.
Yeah ill begin with the some of them for the quarter results followed by early with the summary of the financials.
We will then open the closer of the question and answer session.
Back to the money to remind everyone. The safe Harbor in the press release also covers the content of this conference call.
Oh, Yeah, I would you like to begin please.
Thank you Amy I'd like to welcome all of you and thank you for joining us today.
You and your families are continuing to stay healthy.
We are very happy with the improvement in our results in the fourth quarter, which outperformed our expectations.
That concludes the very hard the ear for everyone else.
Despite being a difficult for you for everyone. We are pleased that we maintained our profitability and strength and in particular, we generated record operating cash flow of $60 million.
Do you see the solid demonstration of the strength of our business even in the toughest of times.
For the fourth quarter of 2020 revenues were $63 $6 million growing by 3% year over year in local currency terms and bear in mind that the year ago fourth quarter was pre corona.
I'll still market subscriber growth was 21000 net in the quarter, which is the gross weight, we are very happy with and at the level that we typically expect in normal times.
I see this as a very positive sign for the coming quarters and it shows that the two run is well under way to recovery and renewed growth.
On the profitability side as you know we have managed the business very carefully to ensure we remain lean and profitable for the quarter, we reported EBITDA of close to $17 million demonstrating growth of 17% year overview in local currency terms when excluding the lost use impairments.
This shows that we continue to be successful in mitigating the impact of the pandemic on all of improving profitability. It is a strong.
Testament to the overall resilience and stability of our business model.
On the cash side fourth quarter cash flow from operating activities of $16 $5 million, bringing our cash and marketable securities position to just under $79 million.
Because of the continuous cash generation strong results and improvements in the general market environment. The board decided to restart the dividend payment policy to shareholders with the payment this quarter of $10 million for 2020, and the new policy of fishing at least $3 million on a quarterly basis.
We are very pleased to renew the sharing of the rewards of it one success with all the shareholders again. The board is remaining conservative while the pandemic is still having its impact and will review the policy of things develop.
Our stability is built on our subscriber base, which remains strong and healthy it's close to one 8 million subscribers whereby the majority of them are paying us on an ongoing basis and monthly fees.
Our revenue starting point for each months he's already on the back of these during the quarter as I said, our after market business returned to its normal growth rate of 21000, new net stops.
The regions that were particularly strong word of Israel and the U S. I note that in January of 'twenty 'twenty, one easy way of had its highest level of new car sales in eastern up 16% year over year, which compares with the January 2020 of prep Covid months of car sales.
Why it is only one months I know and maybe catching up from car sales, which were not completed in the queue for shut down. It is another sign of 2021, you starting with.
While many countries in South America are still highly impacted by the virus and economies remain weak there, but we are seeing improving trends, especially in Brazil and in Mexico during.
During the quarter, we saw a decline of 5000 OEM subscribers I remind you that in Q2, we lost 27000 and in Q3 the loss declined to 12000 and therefore the decline in the OEM base over the past here has been dramatically curtailed in the fourth quarter and we are clearly.
Moving in the right direction.
We don't see the OEM base is simply of subscriber growth story, we are working hard to harvest all of the synergies across our entire business and in all our various geographies cross selling and replicating successful business models and says from one region to another.
We stopped all the large ascribe the base of almost one 8 million paying customers to bring them, new invaluable telematic and related services, but for which we can organically grow our sales. We believe it has the world's most bust of the pandemic. It run is very well positioned for growth.
In summary.
Overall, we are very pleased with all of our fourth quarter financial results ending the hardest.
History gives.
Given our improvements and the strong cash generation the board decided to renew our dividend payment, while maintaining a level of conservatism as long as the pandemic impact continue globally. As you can see we are sharing with the ongoing fruits of our success with our shareholders.
We've managed through the crisis will maintain profitable business and generated a strong level of cash flow, which represent the resilience of our business model.
We also use the slower periods to make incremental improvements throughout our business to look for efficiencies and harvest synergies I believe we are now very well positioned to resume growth and increased profitability through 'twenty 'twenty, one I will now hand, the call over to early for.
For the financial review of Ellie.
Thanks Al.
And no debt the results I present will all be on a GAAP basis, including the adjusted EBITDA net EBITDA, which excludes revenues and costs related to the purchase price of locations. We believe this will provide a better understanding of our ongoing performance.
Revenue for the fourth quarter of 2020 were $63 6 million daus of decrease of three per cent compared with revenues of $65 $5 million last year.
The local currency terms, the fourth quarter revenue increased by 3% year over year.
Revenues from subscription fees were for $45 8 million, a decrease of 8% year over year in local currency terms subscription fees, but at the same level as the.
That of last year.
The subscriber base at year end was the 1.768 million and the increase of 16000 net over the over that.
Of the end of Q3 2020.
During the quarter there was an increase of 21.
All of them in the aftermarket subscriber base and the decline of 5000 and the OEM subscriber base.
For.
Product revenues were $17 $9 million, an increase of 13% compared with that of the fourth quarter of 2019 the.
The geographic breakdown of revenues in the fourth quarter was as follows the Israel, 49% for it in 23% rest of world of 28 per se.
Operating income for the quarter was $12 $1 million, 19% of revenues compared with an operating loss of $16 $4 million in the fourth quarter of last year.
I know that fourth quarter of 2019 operating expenses included an impairment loss of $26 2 million.
Related to the acquisition of for all track holding in.
In local currency terms and excluding last year's fourth quarter impairment. The operating income would have grown by 33% year over year.
EBITDA for the quarter was $16 6 million 26, 1% of revenue compared with an EBITDA loss of $10 7 million in the fourth quarter of last year.
Currency terms and excluding the above mentioned fourth quarter 2019 impairment EBITDA.
Would have increased by 17% year over year.
Financial expenses for the quarter was $2 2 million compared with net financial income of $3 3 million in the fourth quarter of last year.
The quarter, we were impacted by noncash expenses finally, due to the exchange rates ex chance on it run the U S. Though a lot of cash holdings in the Israel as well as the change in market value of favorite one.
While the financial income last year was as a result of the change the game obligation to purchase the Noncontrolling interest of road track in the fourth quarter of 2019.
Net income for the fourth quarter 2020 was $6 8 million 10, 7% of revenue or earnings per share of 33 cents.
This is compared to a net loss of $15 $3 million and net.
The loss and loss per share of <unk> 73 cents in the fourth quarter of 2019.
Cash flow from operations for the fourth quarter of 2000 of 'twenty was $16 $5 million.
In terms of our full year 2000 of 'twenty numbers.
Revenues for 2020 was $245 $6 million, 12% below the 279 million $3 million reported in 2019.
Revenues from subscription fees were.
$180 million to $90 million.
<unk> a decrease of.
The 11% over the last year in local currency terms subscription fees were at the similar level to those of 2019.
Product revenues were $62 7 million sort of.
Representing a decrease of 16% compared last year.
Operating profit for 2000 of 'twenty was $27 $8 million 11, 3% of revenue an increase of 23% compared with operating profit of $22 $7 million eight 1% of revenues in 2019.
Excluding the impairment in both nine 2019 and 2020.
Local currency from the operating income decreased by 7%.
EBITDA for 2020 was $46 7 million or 19% of revenues an increase of three per cent compared to $45 5 million Golar 16, 3% of revenues in 2019 ex.
Excluding the impairment in both 2019 and 2020, the EBITDA in local currency sales decreased by 7%.
Net income in 2020 was $16 1 million $6 six per cent of revenues for fully diluted earning per share of <unk> 77 cents compared with net income of $6 $9 million, 2.5% of revenues or fully diluted earnings per share of <unk> 60.
Three cents in 2019.
Cash flow from operation for 2020 was a record 60 points.
$1 million.
As of December 31st 2020 of the company had cash, including marketable securities of $78 8 million daus and the depth of $54 5 million amounting to a net cash position of $24 3 million for.
This is compared with cash, including marketable securities of 40, $54 3 million and the depth of $67 9 million amounting to a net debt of $13 6 million as of December 31st 2019.
For the 2020 of dividend of $10 million was declared the board decided to restart dividend payments to shareholders and resume of new policy of issuing at least $3 million on a quarterly basis.
The dividend record date is March 23, 2000 of 'twenty 'twenty, one and the dividend will be paid on April six 2021 net of taxes and levies and the.
Rate of 25 per se.
And with that I'd like to open the call for the question and answer session operator.
Thank you ladies and gentlemen at this time, we will begin the question and answer session.
If you have a question please press star one.
Wish to cancel your request. Please press star two if you are using speaker equipment kind be lift the headset before pressing the numbers.
For your questions will be pulled in the order of the RSC. Please standby, while we poll for your questions.
The first question is from Tabby Rosner of Barclays. Please go ahead.
Hi, This is Peter is absolutely part.
On the topic. Thanks for taking my question congratulations on the solid quarter.
I was wondering if you could give us some color or some more color on the gross margins in the quarter and maybe of the trajectory going into 2021 puts the purely on what seems to have the big city of a big uptick in the product gross.
Gross margin for the quarter.
And then also of the follow up I just I.
Was wondering if you could give us an update on the road track operations and the.
The strategy there.
Okay.
Uh huh.
Okay. So we got the gross margins in the I would say the the increasing in the <unk> sales. During Q4 I would say that this is not a typical of an average of quarter.
And the reason is that the if you remember.
Until around the July.
July August the.
The plans of the production lines were close.
In Mexico, and in Brazil, and as you remember our OEM business is a non res to co brands.
In those regions so.
Soon after the Lockdowns are finished and the market stopped all operating.
Operating again.
The there was a I would say.
The impact on their needs to increase their inventory.
The the automatically made of very high purchase from us for the hardware and the.
And the plans that they are buying from us. So I would say that Q4, it's not the typical quarter. Despite of ways something that can explain that the growth in our gross margins, which reflect also to the growth on our operating profit from Q3 the sequence.
The situation is the <unk>.
More than the medium Golar and defense, which is not the typical growth quarter to quarter end of two one so I in order to be more realistic and in the order to be on the same page with the investors I would say that we are not expecting the.
Is it in this.
The gross rate in gross numbers in the coming quarter sales.
Saying that debt I would like to of course to repeat Oh My in my speech in the PR is debt, we totally expect that the we will continue the trend of growing.
We see a very positive trend.
Trend, we see of positive request in the in the market's open which is the will be in favor of our growth, but the difference between Q4 and Q3 in the specific item.
Is it is because of the explanation that I just.
Gave too.
Okay.
That's taken the pets.
That's great color.
And then.
Okay.
Maybe just a brief update on the.
The road track operations. Okay. So the roles of our Corporation is there is the ease of very depend.
On the as I said on to our customers.
The most of them are a car producers.
We have one in Mexico, and we have one which is our customary in Ecuador, Colombia, Brazil, and Argentina. The one in Mexico, we find a very enthusiasm from our side too.
The relationship to increase the installation to a cargo more model of cars.
From the house all of our point of view and also from the service point of view and.
We are quite sure the base on the on the discussion that we had debt in the 'twenty 'twenty, one we will install it.
In Mexico, a higher number and then maybe the highest number of units ever.
On the other end with the other common of fixture in the Brazil.
Brazil, and Argentina, as we said two years ago, we are no longer a hardware provider, we are only of service provider.
So we already showed a very sharp decline during 2019 and even in the beginning of 2020 now we are not expecting additional decline, but on the other end I am not the.
I cannot say that we expect gross on the on this for geographies, but we really will maintain the profitability the profit and on the same time as I've said in the past we bring other assets to those geographies in.
Brazil, we already have we have the the they historically to run operations, which continue to grow but in Ecuador, and Colombia. We are now more focusing in penetrating different segment, mainly fleet management and other areas.
Car dealers or even car manufactures, which I believe will overcome the and grows the business with the current common of picture.
That's perfect. Thanks. Thanks.
Thanks for the question.
Congratulations on the results.
The next question is from David Kelley of Jefferies. Please go ahead.
Alright, thanks for taking my questions maybe.
Maybe to start with the solid rebound in the aftermarket subscribers just curious as true your view on the sustainability of that growth or even if there's opportunity for upside I believe you referenced the robust January Saar.
But also could be some pent up demand driving that as well, but we're also having the back seat ramp up just curious as to how you're thinking about the potential for the aftermarket subscriber growth rate going forward.
Yeah.
The first of all.
I must mention that the.
In the end of the day, there is a lot of influence from the pandemic.
As we faced during the mid 2020 now I think.
And it looks like of course because of the vaccine aspects, but also I think that the country's governments and people.
Understood debt all of us have to find the way to leave aside to live with and we cannot shut down for the rest of our life all of the business and all of our life quality. So I think that its looks like and by the way in Latin America. For example, there is not yet the vaccine.
And are they still decided not to go for the strategy of Lockdowns three of four months ago and the markets are open of course of some limitations some.
Obligations.
Some of base I'm, not obey but from our perspective from the.
Business.
Yeah.
It looks like the business all walks of course.
They are not the same.
Sell a car says that it was in 2019, but it looked like the decline is lower than we were expected its not 2025, 30% less it's going to be we believe 10, 12% less than the day before the pandemic and we know is it to run how to overcome.
By gaining more market share.
Offering more more solutions and more applications.
Hey.
Regard, the Israel and regard the aftermarket subscribers.
Want to be conservative, but still.
Say that I believe that we're going to the the number that we showed in Q4 when most of the markets were open in Israel and in Brazil.
And in the U S by the way.
Uh huh.
Is giving us a sense of how the next quarters are going to look like.
Forget that we are now in a position to reap the fruits of our investments mainly in UBI in applications for every customer that we charge for it. So we see debt. We are no. We are not only sales fleet management or or traditional fleet management and <unk>.
Traditional SVR, we're selling UBI, we're sending application, we improve and expand our fleet management.
Solutions, we provide diagnostic which three or four years ago, we didn't have it et cetera. So I believe that in the after market. We will continue with this trend of being Oh for number of Ah. This close to 20000, maybe 17 of two.
Two I don't want to come true.
But of course, much much bigger and much higher growth than we showed during our 2020 during the pandemic.
Absolutely.
Okay. Thank you that's that's helpful and maybe just looking for an update on the on some of your cost initiatives.
Structural cost savings zero of the pull out of the model, but I believe compensation expense started to ramp back up last quarter.
Offsetting that of beds could you just walk us through the puts and takes some of the cost initiatives that impacted Q4, and maybe how we should be thinking about the cost structure I into 2021.
Okay. So we got compensation.
During Q4.
The majority of our cost saving until Q4, we are back to are we back to day to day.
For the times before the pandemic we <unk>.
Change back all of the compensation of not all but the major portion of the compensation in the group. The additional will be in Q1, when we had the decision that the employees.
Except very few people like me a win win.
Back to a 222 to the normal compensation and.
And of course.
They deserve it they've been with the company doing almost day Eve.
All of them were very effective the walk from remotely the work when the when they would be needed in the offices all around the world and I'm happy that we are in a position that we took the decision by the way before we decide to pay dividend because the employees are in the first stage of it the one.
Okay.
Regard the other expenses, we have to understand.
It's not material, but I must mention it for example, we have less flight people not flights you need to run when we are a global company. It has some saving about all of the addition of savings I think are in a number of few hundreds of thousands of dollars ive not more than this the.
Major portion of the savings was calm.
Compensation and in Q4 major part of it already in the numbers that youll see meaning we are not expect.
A major growth in our expenses in Q4, maybe if we'd be very and material number but there will be a few tens of thousands of dollars for Q1.
That's the.
Okay got it. Thank you very much I will pass it along.
The next question is from Mr. Shan.
The <unk> of Oppenheimer. Please go ahead.
Hey, guys. Congrats on a really positive into 2020, and it's encouraging to hear of that the company that turned to paying the dividend.
On the topic of the dividend.
We appreciate fully that we're not past COVID-19.
The company like being you know kind of many of you can run in the very conservative way.
What would be the puts and takes as to how the board might be thinking about dividend levels with the macro outlook normalizes.
More broadly on capital allocation of that I'll, just add you know how should we be.
I'm kind of interpreting the word minimum when we think about minimum $3 million.
Thanks.
Okay.
Okay.
First of all of our we have to keep even from a legal perspective because of those all of these policies is legal meaning so we don't want to being the position.
The debt there.
Zero flexibility, but.
Also historically.
When we decide on policy when it was $5 million. If you check back you'll see it always was $5 million of was always was.
Uh huh.
For a minimum of five five.
I would be.
I would say that we should expect 3 million dollar.
Per quarter, and I think that.
Quota in the next couple of quarters, We will review again, what is the situation with the pandemic how things change in the world how the company feel because it can there is no doubt the twin everybody looks on our balance sheet. There is.
And you have to take a view on the current balance sheet for today without looking Uh huh.
The future so.
Even myself why not paying more because when we take the decision we cannot change. It every months of every two and all of US know we are still in the shaky world, It's not something very stable I'm optimistic I see that we as of to run.
Should it be and we and we prove the debt even if things will be bad in the world. We know out of overcoming but still we prefer and this is part of the DNA of it run to be conservative.
So we decided to go for the same site.
I would expect as an investor that it will be $3 million.
Once we will decide to change it we really change it we will declare we will our reported its not something that we will still price people are there's always a good surprise, we will not come the reason that we did the $10 million.
Which might look like the surprise it still was on the table when we had the last quarter's.
Call and I've been asked the question I said that I feel that the company in the coming.
In the in the in the short future.
We'll probably review again and take the decision again and since we Didnt pay D V. The almost all of the year, we decide I would say to compensate this bust by paying something is the one time that can compensate all of 2020.
This is the reason maybe the 10 million is it might be so price, but when we're talking about the policy.
Looking forward.
And what we said well what we report this will be the number it will be $3 million. It will be more we can change the policy of we let the people noticing the defense.
Okay, Great that's very clear.
I wanted to just follow up on the previous question that you guys had on operating expenses just to clarify it fully.
So there are maybe some minor management kind of salary.
Salary that may not be at you know at the full levels, but otherwise when I look at the for Q.
Operating.
Expenses, I should be kind of thinking at <unk> and QQ.
Somewhat plus minus similar levels I know that theres, some foreign currency that could come and move the numbers, obviously that would be adjusted also on the revenues, but just just to clarify here.
Absolutely I think that again.
Again, when we talk when we don't want to talk about small change. So Q4 expenses. These are very close to the actual expenses of Q1 of course on the local currencies and we always give a.
We give a kind of translation in our numbers, how it would look like without the currency effect, but in terms of expenses.
The change in Q1 will be very very mindful of which will not be material for the results of the company.
Okay great.
Any update you guys can give us on how the aftermarket plan in Mexico are going any changes in the timeline and the.
Acceleration of the timeline delays or the.
The auto market in the Mexico, which is mainly something that we are.
What we are doing is we are duplicating the ICI ICSC to one single day between Brazil, meaning selling is to run plus insurance when we have a backup of the of the insurance companies and we're kind of in the.
Digital agency.
The thing that we are leading in the Brazilian market, we are almost the day the.
The the sole supplier of those solutions.
What we did in Mexico first of all of course, we had the delay because of the COVID-19, we didn't want to start.
The first campaign and the launch campaign, while everybody are in Lockdown and the mood is low and we of course took the advisors.
The advisor of power and.
Marketing and advertising agencies.
But now really beginning of 2021.
We launched it.
And what we did the first which is very important and I'm very proud that we get to this point, we signed contracts with the insurance companies that we needed in order to give us the insurance for the market because of all of its work people are buying a solution.
Only SAP solution antisense solution with insurance.
From it to run and CNC to run cannot sell insurance, we I cannot provide ensures we have the where the backup we have to of partners. So this is something that we have many using Brazil. So today, it's looks like ongoing but to create it at the beginning it's very difficult because of the insurance companies by the way taking the risk of cannibalism for themselves.
Because when I sell of specific insurance.
People can decide to buy this insurance and not the full insurance, which they make more money, but we succeed to convince insurance companies in Mexico debt. The cannibalism would be very low and they opened a new segment through us.
So I'm really optimistic, but we have to understand the slight creating a new business, it's not something that in our 2021 in the end of the of you will ask me how it goes what is the contribution it will be low contribution but since it's also is in the operating leverage business and the <unk>.
Since we once you educate the market we think we can take one of your <unk>.
18 months to educate the market there is the new solution for insurance is like.
I would compare it for example, two of digital insurance with the the first digital insurance company.
<unk> I think the has some difficulties, but today probably the are the leaders.
We always have difficulty when it you have to educate the market was the new product.
New solution.
They have to trust, you et cetera, and it takes time, but the first pilots, which is in the low flame and low numbers that we just did recently really in the last week few weeks.
It looks very very good at look better than when we start 10 years ago in Brazil, if I want to compare the first months in Brazil 10 years ago in the first loss in Mexico, Mexico looks better.
The long is going to take it will take time. It run today is the business of $250 million of year, it's very difficult to provide growth organically in few.
<unk> of few months, but I look more longer future meet future 2023 of 2024.
Confidence or I hope that it will going to be a very important arm of our future growth.
Okay, Great and then with respect UBI in Israel, I mean, I assume it it's part of the really kind of nice rebound that we're seeing in the aftermarket growth but any.
Any change there with how you're thinking about the dummy international with the any kind of update you can get on that timeline.
Absolutely you're right.
This is part of our.
Of our I would say success in growing our aftermarket subscribers I must say the since the Israeli market and also the Brazilian market back to set of cost in a very high numbers.
Also succeed with our traditional SVR solution to grow our subscribers I mean.
During the pandemic, we thought that we will find ourselves selling or growing the only in the UBI today a few months after.
Again after the the car says.
Renewed.
I see that we have.
Also SVR sales also growing in all of our SVR.
Subscribers, but of course, the UBI pushing it stronger and.
Looking forward and I see how the UBI is growing again.
Just want to remind you we started again all of about 15 months ago and debt.
The exactly the awards that they said it will take time it will not influence 2020, but now in 2021.
Absolutely the.
The number will be more.
More major influence of course again, it's not we're not count only on Upi Upi is of very strong.
The influence on growing subscribers and this is even before all of the insurance companies. The signed contract results already integrated and start selling it I mean, we still have additional insurance companies and don't forget the again, it's also in educating educating the market and as the Navy.
And we are talking about thousands of new subscribers in months.
After a year, so I'm very happy and proud that we are in the strength.
Got it.
Copied to other markets.
The main markets are all our other markets are in the in Latin America.
And the I think that Latin America is in the stage like Israel was three years ago until three years ago that the insurance companies.
Didn't understand what is our offering because they were very traditional the orientation. They didn't want to change the traditional insurance policy and insurance way of selling through broker of et cetera.
And then the digital insurance companies penetrate to Israel, the price went down and in order to compete with those companies. They have to go out of the traditional way and debt towards the door of the window that we get.
Of course today, they can offer of cheaper policy into complete among new.
The digital insurance companies now in.
In Latin America, specifically in the Brazil and in Mexico.
Ah.
I think they are.
One of two legs behind Israel.
So we try it because we have the solution we of the technology, we have the relationship I must say that the insurance companies are.
Very polite in letting us know that they are not interesting not the need to run solution, but in this solution.
But.
15 years ago, nobody thought that we'd be live for iphones and now everybody has an iPhone. We are when somebody's for us from the Dolby come from the window and if the window is closed we come through the wall and we will be there we have a strong relationship in the.
With insurance companies in Brazil, The trust us and I believe debt.
As long as we continue to sell Ics and to sell the insurance company solution for US we are there.
The in one day.
The store will open and we will be the supply of like in Israel, I Hope and believe that we will be leaders. This is in Latin America.
But now I don't see sales come from Ub Ub eye out of Israel.
Okay. Okay, great Great last question from my end debt.
One of the technical question.
Capex was obviously lower this year relative to last year again.
There are probably from some currency <unk>.
Impact here, but how should we be thinking about spending in 2021 is there anything that may have been delayed that might have to be even raise the number of little bit higher any kind of guidance there would be helpful. In modeling.
Okay.
Okay.
Basically the Capex the majority of the Capex relates to the end units that we are selling of Docomo data in Latin America, especially in Brazil, and Argentina, and again due to the in D. C and in 2020 due to the pandemic of course, the were less sales and that means less sales of less capex net purchases of unit.
Okay, any kind of general number that we should be thinking about on the Capex I mean should we be looking at it.
The proxy from the product revenues that are becoming going to be coming in I mean, how does that get time relative to the quarter any kind of guidance there would be helpful.
It's really hard to say, especially with the pandemic now.
I would say I mean, I would say if you want to take somewhere between 2019, an average of those I believe this is something that can be presented for 2021.
Okay. That's great. That's very helpful. Okay. Thank you guys for taking my questions.
Thank you.
Yeah.
The next question is from Ethan Etzioni of Etzioni portfolio management. Please go ahead.
Hey, Ken.
Is there any additional questions. Please press star one if you wish to cancel your request. Please press star kit. Please standby, while we poll for more questions.
There are no further questions at this time before I ask Mr. Sharon share Rusky to go ahead with his closing statement I would like to remind all participants that a replay of this call will be available tomorrow on <unk> website at www dot.
It's Ryan Dot Seo Dot IL, Mr share at ski would you like to make your concluding statement.
Thank you.
On behalf of management, the free to run I would like to thank you our shareholders for your continued interest and long term support of part of business.
I do look forward to speaking with you next quarter and hope that we will.
I'll see better times by then you have a good day.
Thank you. This concludes the to run the fourth quarter full year 'twenty 'twenty results conference call. Thank you for your participation you May go ahead of disconnect.
[music].