Q1 2021 Mosaic Co Earnings Call
[music].
Good morning, ladies and gentlemen, and welcome to the mistake companies first quarter 2021 earnings conference call. At this time, all participants have been placed in the listen only mode. After the company completes the prepared remarks. The lives of what would be open to take your question. Yeah. The hosts for todays call its more of a jackman vice.
Resident Investor Relations of the mistake company his guidance you may begin.
Thank you and welcome to our first quarter 2021 earnings call opening comments will be provided by Josh Goldberg, President and Chief Executive Officer.
Good day of Fireside chat as well as open the Q&A Quinn.
Clint Freeland, Senior Vice President and Chief Financial Officer, and Jenny Wang Vice President of global strategic marketing and other members of the leadership team will also be available to answer your question.
We will be making forward looking statements. During this conference call. The statements include but are not limited to statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties actual.
Actual results may differ materially from projected results factors that could cause actual results to differ materially from dosing of the forward. Looking statements are included in our press release furnished yesterday and in our reports filed with the Securities and Exchange Commission.
We will also be presenting certain non-GAAP financial measures of fourth quarter press release performance day to attached as exhibits to yesterday's form 8-K filing also contain important information on these non-GAAP measures.
Now I'd like to turn the call over to Jack.
Good morning, Thank you for joining our call today mosaic delivered excellent results from the quarter with revenues up almost 30% year over year and the gross margin rate at the highest level since early 2015.
Our momentum continues to build higher fertilizer prices driven by very strong global demand tight supply and excellent agricultural fundamentals combined with our significantly improved cost structure lead us to a positive outlook for the remainder of the year, Laura lets move on to the analyst questions.
Chuck we've received several questions about nutrient affordability its impact on demand and sensitivity to commodity price it.
Specifically, how elastic the developed market demand tend to be and how much application of elasticity do you see in emerging markets.
Thank you.
Generally speaking within normal ranges grower demand for fertilizer is relatively price inelastic, whether that be in developed or emerging markets.
Accepting that changes to demand would then be driven by acreage and by yield expectations.
However, growers will look at the return on investment of fertilizer applications, and particularly if the prices of crops are elevated or Conversely, if they're down they will adjust the rates higher or lower in order to maximize their yield potential.
Certainly appears that last year and now this year, we're seeing signs of some of those upward adjustments to application rates.
And India Max.
Maximum retail price is set by the government.
Such Indian farmer affordability, maybe negatively impacted this year.
Got a few of our analysts had questions regarding the phosphate sales volumes during the quarter T.
P. J G of the car of the city and Vincent Andrews with Morgan Stanley bulk asked about our sales volumes being higher than our production volume despite lower inventories of raw material constraints kit.
At mosaic draw down further inventory and will that offset the sulfur and debt.
Thank you gentlemen, our inventories do.
Continue to be below typical levels for this time of the year, but you must understand that this is normally the time of the year were strong spring demand means we will run down our inventory and that's typical of most years.
At the end of the quarter, we certainly had lower than normal inventories. However, we also relied on 100000 tons from Martin the flow through of the phosphate segment.
John Roberts of UBS, and Joel Jackson, BMO asked for additional color around the software market specifically.
Is the sulfur shortage only of north American phenomenon or our sulfur prices going up elsewhere also do we think the situation could extend into the second half of the year and what plans do we have in place to resolve the Q2 self of shortage.
Thank you gentlemen.
This year the molten sulfur supply was constrained due to COVID-19 impacts on refineries and this was exacerbated in that freeze at the February of 2021.
So when you ask is this a local or global issue.
The way sulfur has played around the world.
But particularly molten sulfur is very tight right now so you will see that we actually melted more in our melter is than we normally would and that was actually up to 27% from of normal about 20% now we do expect U S refinery activity to recover in the second half, which would take us back to more normal levels.
Sure Michael Picken of Cleveland Research, Ben Isaacson of Scotia, Andrew Wong of RBC, and Steve Burns of Bank of America, All aspirin update on Canpotex negotiations with China in particular, the ask that with the domestic potash price in China now.
<unk> over $100 per ton higher than the last important contract price and about $100 per ton of about the recent India contract price.
What are the implications for a new contract in late 2021, and what might be affected the 2022.
Thank you look canpotex is committed through quarter three as Dave said publicly and we're seeing strong demand in North America, and Brazil, and Southeast Asia, all of which were seeing prices go up and this price strength is also occurring in China spot market. So we see all of those markets as having high.
The mountain, which is shown by Canpotex is.
Tight supply and even India, now, which was had an updated contract is now well out of the money and it seems to be outdated. So we see all of these things is very positive for of the potash market moving forward and I expect they will lead to an earlier and more constructive settlement.
The Chinese at some point in the fall or early next year.
Jack I have a two part question here, Michael Pike in Cleveland, and Adrian to Michael Darrin, Bergen, Ben Isaacson of Scotia have all asked about mosaic for the lasagna.
First do you have guidance for fertilizer answer is from a pricing and margin standpoint, or how should we think about pricing and margin progression as part of his answer it.
Thank you well, we don't give specific guidance for mosaic fertile as entrees.
We have said that of the pricing sensitivity, we provide in our earnings materials are down about 20% of that enterprise impact occurs in mosaic furloughs of entrees.
Now also we have historically seen distribution margins in the range of 25 to $40 per ton. We believe that those two together should give you. The information you need to model, our Brazil business.
In terms of cost a quarter.
Quarter, one was impacted by a few short term issues related to mine productivity and lower conversion rates, which are temporary in nature and should improve throughout the year.
Also remember there are actions being taken for COVID-19, the will impact our cost short term in Brazil as they are in a fairly serious spot with with the COVID-19 right now.
Finally, depreciation of the Brazilian real has offset the increase in inflationary pressures that we're seeing there.
The second part of that question Jack was a follow up.
Could you discuss seeming disconnect between the magnitude of price appreciation for M. A P versus a much smaller increase in average realized selling prices for mosaic for the lithography.
Thank you our average selling price include blends that have a significant amount of nitrogen potash and lower grade phosphate materials in them.
Of which will vary throughout the season and can have a real impact on our realized pricing.
And that a significant portion of Q1 sales were committed in Q4, which contributed to the pricing of lag and that is typical in Brazil due to the logistics constraints in that country.
Jock we've received several questions on India in particular, John Roberts from UBS, and Andrew Wong of RBC ask about our outlook for India's of agriculture business fertilizer demand and nutrient affordability, resulting from higher retail prices. They would also like to know if COVID-19 is having any of.
Correct.
Thanks, gentlemen.
Good morning assumes and full reservoirs and even still attractive crop prices continued to point of favorable farmer economics in India.
Certainly COVID-19 is disrupting activity of the country goes into lockdown.
And we've seen a bit of a pause in the near term activities. So we're waiting to see how the country addresses the most recent outbreaks.
The COVID-19 is a near term headwind the underlying demand for nutrients remains significant as indicated by the extremely low inventories and still strong crop prices.
We will not speculate on subsidy changes, but believe the government is committed to maintaining domestic food security.
John P. J <unk> of Citi, Seth Goldstein of Morningstar, and Michael Picken of Cleveland Research have all aspects of thoughts on Chinese phosphate supply and demand.
What are our expectations for Chinese phosphate exports in 2021 and are we concerned that attractive price you could lead to higher operating rates.
Thank you.
Our base case for 2021 shows phosphate exports relatively unchanged.
And we expect them to stay at around the $9 3 million tons. We saw in 2020, now clearly and even the latest report show of the operating rates in China are up probably exceeding 80%.
But most of that is going to internal demand inside of the country. So we have seen so far exports that are right on our expected target.
Also theres been several structural changes that occurred last year in China, and I'm going to let Jenny just give a little bit of background on some of the major ones there.
Sure Josh we've seen some structural changes the in the Chinese phosphates in the Sri Thanks, a lot yeah.
For price side, all of the Chinese largest.
The third G. P. C D have shifted their production from producing the E. P. M. A peep from fiber to other industrial life of yourself Peter low five for example, the has shifted production to a pure from it.
That's it I'm not only for yourself in the food industry, but the also in the emerging.
Both of them.
Total vehicle and the <unk> station.
The magnitude of all towards the battery.
We see this is going to continue in.
In 2021, and the going forward. Therefore, we are going towards the last piece of all fine to be produced of D. A key and MEP.
Change is really on the demand side the <unk>.
Thank you.
Phosphates the Hum.
Growing in 'twenty 'twenty.
Which has kept most of the increase the production in Q1 at home. Therefore, we see really little exports the increases in first quarter.
Yeah.
Just following up on this topic, John Roberts and Ben Isaacson, both asked about the marginal cost of phosphate producer of specifically have costs from marginal producers trapped with phosphate pricing.
Thank you.
Price increases for the integrated producers of largely outpace the production cost increases, including those in China to the point the most Chinese producers there are experiencing good margins, despite part of the higher raw material costs.
So now the marginal cost producers are predominantly the non integrated producers in India.
I am, particularly those that are reliant on imported phosphoric acid, they're down the production cost of the new Q2, phosphoric acid contract price of $998 per tonne.
As of about $615 per ton or about $50 per ton higher than the Indian import of DAP price.
Jack we have two questions on our global distribution businesses first.
Mark Connelly from Stephens.
What is good across the cycle margin assumption for distribution is now given our operational improvements from growth.
Thank you Mark here.
Historically, we've targeted around $25 a ton for our distribution business, but we have seen that improve with the economies of scale of inefficiencies and we've seen that margin expand recently.
Gail matters and this has led to this quarter's margin of $40 a tonne.
And even higher for our combined business in India and China.
Andrew Wong of RBC also ask what China, and India distribution contribute to earnings.
Thank you Andrew and this quarter, we had a combined gross margin of the two businesses inside of around $30 million.
But we have to understand that the margin was enhanced by the upward trajectory of phosphate and potash, which allowed for profit from the inventory that was held by those businesses.
Jack we have a few questions on free cash flow generation and capital allocation.
First Vincent Andrews assets, why net income increased by 300 million quarter over quarter, but cash flow from operations only increased by $130 million what are the drivers of cash flow from operations this year versus last.
Thank you Vincent I'm going to hand, the straight over to Clint to talk about our cash flow.
Thanks, Josh and good morning Vincent.
I think there are.
Specific to the year over year, I think a large part of that is inventory.
Inventory movements between the two years last year. We were if you recall, we were we had very significant inventories were liquidating some of those excess inventories where this year.
Our inventories built by about $180 million, mostly in Brazil and cash.
Canada.
I think of year over year comparison, that's what's driving a lot of it but also recall that every year during the first quarter there are some pretty meaningful accruals.
That are actually paid out in the first quarter of those accruals, primarily being some tax accruals from the previous year that actually pay out and hit our free cash flow in the first quarter of every year as well as our short term incentive accruals that again.
Or accrued the previous year, but paid out in the first quarter of every year. So that's just something to keep in mind.
That of recurring things in the first quarter each year.
Second related question comes from Ben Isaacson of Scotia, who asked me.
Jake has revised its thoughts on capital allocation given the strong free cash flow mosaic will generate this year, especially as Q3 capex winds down.
Thank you Ben the.
The simple answer here is no we're not changing our priorities. We continue to have all of this approach to capital allocation, which balances debt repayment returned to shareholders and investing in the business and high return.
Quick payback projects.
There's a couple of things I'd like to highlight here.
Earlier this year, we increased the dividend by 50%.
We've committed to paying down $450 million of long term debt that comes due in November.
And the other piece is we've had a number of really good return projects in our transformation and we continue to invest small but meaningfully in those high return.
Quick payback projects so we.
Completely remain committed to doing exactly what we've said all along which is balancing off all of our positions and frankly, that's what our investors have said they expect of us.
Thank you that ends our fireside chat now I would like to open the phone lines up for any further questions from the audience.
Thank you as a reminder to ask the question you will need to press the star one on the telephone.
Question from Keith we will limit the participants to ask one question.
Then it gets a chance to ask you a question the spread.
Had a follow up question. Please press star one to get back of Keith Please standby, while we compile the Q&A roster.
The first question comes from the line of Steve <unk> from Bank of America. Your line is now open you may ask your question.
Okay.
You have reportedly some forward the sales into the third quarter of map and DAP.
The prices were the five and the friends it seems.
Like the fairly lofty price, but I have no idea whether the volume is really light can you comment on.
On the how much forward sales do you have into third quarter right now and maybe compare that to historical levels are you seeing the.
Distribution channel more interested in building inventories even at these prices than normal or is are the high prices, causing.
The kind of a pullback in a wait and see approach.
Standby we've lost connection.
To the group, we will be right back.
You're back.
Hello, operator are we back.
Alright, perfect and Steve Bryan. Your line is now open you May ask your question. Please.
Okay. I guess you didn't like that question Jack do you want me to run the body again.
I would love you to I think I've got two words into it. So it wasn't anything about your question we love your questions.
Okay.
It's really about your forward order book.
Hum.
There was some reported.
Sales of phosphate both snap in GAAP in the mid five hundreds.
A short ton into the third quarter, how much volume have you sold forward and maybe more more broadly how would you characterize the the demand outlook into the into the fall at this point relative to historical levels. It is the strong egg cycle.
Causing that distribution channel too aggressively once the rebuild inventories or is there risk of that.
We could see a pullback in more of a wait and see until later in the year.
Yes, Thanks, Stephen I again, I apologize for the loss of connection there for a few seconds.
In terms of the forward order book, if you will.
The I suspect what you are referring to is.
Think of late last week.
We started to have people come to us with summer fill.
Needs so the.
The spring season is basically finished from our perspective and now the some of the larger.
The retailers of come to us looking for positioning materials for the fall. It is a little early for a fall.
Graham and frankly, we think the prices were we expected some little different prices as you go into the summer lull, but with the tightness that is in the market globally and then in North America, we're starting to see people come to the market earlier. So we will look at this as a very good sign and a good sign for an earth.
Early and aggressive fall application season.
Next question from the line of Adam Samuelson from Goldman Sachs. Your line is now open you may ask the question.
Hi, Thanks, good morning.
Maybe.
Along the similar align Jacques.
Just trying to think about your phosphate realizations in the GAAP and you are kind of what you're talking about in terms of your second quarter of price improvement versus what we're seeing and.
The benchmark pricing out of Tampa or NOLA. It seems like the benchmark prices have gone up more of is that a function of the volume shortfall in pre committed tons.
I'm trying to make sure we understand.
The GAAP there seems to be wider versus the published benchmarks in the history.
Yeah. Thanks, Adam I think there's a couple of things there of course from there.
There was great demand earlier in the spring season than usual I think because of the low inventories we start off with.
But.
So there is always a big lag and this is we sell early Q1, even Q4, we're not Rev racking of them until well into this quarter.
<unk>.
Always that and then there's the people who are buying early and that's when the when the price gets set when they buy so if we look at the ending price or the high price of in the 590 <unk>. It was only there for a short period of time and it was probably for the just in time deliveries as opposed to the people who plan.
Better so we expect.
Now we're going to see Q3 average net backs rise again as we sell into the summer fill and basically.
We will move into the into the fall with that and we don't have much lower price carryover anymore. So the light will decrease.
Thank you. The next question comes from the line of John Roberts from UBS. Your line is now open you may ask a question.
Thank you it sounds like Youre, not thinking about any big investments, but since conditions are improving when that time comes do you think it will first be in potash or first in phosphate or the distribution acquisition or maybe for the back integration into ammonia.
I think the first big opportunity comes from.
Yeah, Thanks, well look.
The way I would probably characterize this as I would like to see the money in the bank before we talk about how we're going to spend it.
So are our first priorities continue to be that we've talked about the paying down debt, we've talked about the priority being the.
The returning money to shareholders and we're not going to rush out and spend a bunch of money on anything until.
Bill and if the right the right opportunity comes where we believe that we can add real value and get an extraordinary return for the shareholders. So I.
I wouldn't.
Think about any of those three as being our priority I think we'd look at all opportunities but.
They have to have.
Right risk risk return risk adjusted return.
Thank you. Your next question comes from the line of C. J J the car from Citi. Your line is now open you may ask the question.
Yes, hi.
One of them one of my questions is.
If you look at Oh, CPE and the Russians at today's prices. They can import here pay the CVD and still make more money than what they did couple of years ago. When they were exporting a lot do you expect that those volumes to come in here as the market remains tight.
Yeah. Thanks P. J, let me start by saying there have been a number of new importers into the U S. Such that I think quarter, one volume of imports into the U S. We're pretty much on par with what they were last year. So it's not that we've got less imports. It's just we have.
Different importers.
From a different from people coming into this market in terms of otp and the Russians.
Welcome to come into this market, but it doesn't really make sense to me with the <unk> with a 20%.
Hi.
Tariff the day.
I wouldn't go to a market another market like India, or whatever which is not being tariffs right. Now. So I think they'll go to where the profits are the highest which would not be North America. At this point there is other markets with the same price without the tariff.
The next question comes from the line of Joel Jackson from BMO Capital markets. Your line is now open you may ask the question.
Hi, good morning, Josh.
In terms of capital allocation.
<unk>.
The lockup for the Vale shares have been all of us for quite some time.
How much are you put on maybe savings from cash hitting some dry powder to take out those shares to clean up the share of one day.
Yeah. Thanks, Joe well I think we've said before that we would certainly look at participating if vale shares came to the market and I guess the way I would look at that as although there are really no different than buying back anyone else's shares. The reason for participating would be more to make sure that the the.
There was a more orderly and less disruptive.
The impact on the market. So we think we would participate will participate based on our cash position of the time.
<unk>.
And.
We'll look at the at the moment at this stage, we don't have official word from Vale on what Theyre going to do with those shares of win so.
But that'll be public it will be the ones to tell us when theyre going to sell them and if they do we'll certainly look at how much and.
How aggressively we participate.
Next question comes from the line of Mike kind of lift from Stephens. Your line is now open you may ask the question.
Thank you Chuck I was hoping you could talk to us a little bit more about your aspirations for biologicals, we usually see net chem companies focused on that you've got a couple of the partnerships now.
Talked about nitrogen fixing soil enhancements can you give us a sense of how broad your interest there goes because those things really run the gamut.
Yes, Thanks, Mike well look what we're looking at with that is how do we extend our product lines. How do we use our beneficial distribution system. I mean, we've got a big distribution system for instance, in Brazil, where we can we can really help these <unk>.
Products get to market, but I would say is look it's early days, we are making some.
Small but.
Well thought out investments in what we're doing right now is trying to fulfill a pipeline and that pipeline will be filled over time.
If you think about it no different from the micro essentials, which took years to develop these will take years to develop I think of <unk>.
<unk> product is now just going to market.
Would expect our sound products to go to market in the next I guess year or two and then.
Our.
AG biome would go to market probably in the year after that so I mean these are long term small investments that are.
Likely to do well over time, but we have to get into it first.
Thank you.
Thank you again as a reminder to ask the question you will need to press Star then the number one on the telephone keypad to the J.
All of your question press the pound.
Keith.
Next question comes from the line of Edwin to Matt <unk> from Baird. Your line is now open you can ask the question.
Hello, Good morning.
The question the phosphate division can you can.
Can you comment on the expected evolution of the utilization rate of <unk>.
The us the state.
Going forward. Thank you.
Yes.
Sorry, I missed utilization the youth.
Utilization rate did you say of.
The phosphates.
Look.
The U S is a relatively.
Stable and mature market, but what we are seeing and particularly with the advent of.
The precision agriculture actually the farmers are.
Really looking hard at what they need to do in terms of putting better.
Fertilizers better technology into their crops and one of the things is benefiting from that as of probably a higher.
Usage of phosphate fertilizers, and particularly our.
Our micro essentials, which is a.
And the efficiency improving hurdles.
Fertilizer.
Thank you have a follow up question comes from the line of Adam Samuelson with Goldman Sachs. Your line is now open you may ask the question.
Yes, Thanks, Jack I was wondering just with the improving kind of market outlook in the in the potash space.
How you would evaluate maybe kind of restarting of bringing back some of the idle co.
I would say capacity and what it would take.
From what from the market to think about bringing capacity back on.
Yes, Thanks Adam.
The question that we're spending actually a fair bit of time on right now because the demand for potash has been strong.
No look we fully expect to meet the demand of our customers and we're seeing an increased demand, particularly internationally.
So when.
When we can legitimately bring back.
<unk>, because it's got a <unk>.
Rice for of enough, we expect price for long enough.
We'll be doing just that and right now we're able to supply our needs through our ramping up K three in our belt plane.
But there will be of time soon or in the next year or two I suspect where.
Claude as they may be required, but it will also require a.
A sustained price.
Probably a little higher than what it is even today.
Thank you. The next question comes from the line of Adrian to Magna from Van Bank. Your line is now open you may ask the question.
Thanks for the follow up so we already.
<unk> I was referring to the utilization of your own the operations you probably not looking at the market. It was down from seven 7% in Q1 revenue.
Thank you.
Our.
Patients Adrian our debt.
We will run those plants, probably pretty hard for the next six to nine months, because and the limit will be like we said earlier I think the limit the production may be at least in the near term will be the sulfur availability.
So we.
We expect to run those with allowing for turnarounds and regular maintenance, but we expect to run those close too.
The full capacity.
Thank you.
Again as anyone would like to ask the question you will need the press Star then the number one on the telephone keypad until the generic question Sam.
Again that will be signed and the number one on the telephone keypad.
Next question comes from the line of Jeff Zekauskas from Jpmorgan. Your line is now open you may ask the question.
Alright, thanks very much.
Given your sulfur shortages.
You said that your second quarter of tons with the.
About equal to your production.
What's your current level of production.
And then Seth.
Secondly.
In terms of the tariffs on phosphate in the United States.
Can they be changed.
Over the next few years or the in place for the next five years as the base case.
Okay. So let me answer first of all I think our our sales and last quarter was about $2, one of which and I think production was in the range of the one 9 million tons.
What we can be looking at in the second in the second quarter probably is.
Slightly down from that we may drop into inventory slightly but.
I would've expected that the same range in that 2 million tonne Mark would be probably about where our production will be accepting.
What were predicting for sulfur limitations.
And recognize those will those will meet the sales.
The second sorry, Jeff just repeat your second part of your question.
Was rushed write it down.
Beyond.
All of the secular.
The question.
Okay.
We have the next question comes from the alignment of the question Jeff.
Let me, let me finish sorry of the CVD question.
Last I didn't write it down quick enough.
So in terms of the CVD there is a yearly review of that amount and even as we move forward. There is a on the opportunity for some level of.
A review of the of those both of the <unk>.
<unk> and of the actual numbers.
And so.
There could be some change from.
From either of the from the Department of Commerce in terms of what they they look and we believe we are actually good.
The reasoning why the CVD rates actually should be higher.
So we'll see what happens there, but I suspect.
There wouldn't be major changes in that in the next year or two but after that there will be annual annual reviews of it will tell us whether they continue or whether they can be modified.
Okay.
Thank you.
Last question comes from the line of written Patel from Exane. Your line is now open you may ask the question.
Hello, Good morning, and thanks for taking my question, just one of them pulse ash with your upgraded shipment guidance of six to 7 million tons I'm.
I'm just curious what sort of puts and takes are required to get each of that 71 million of the upper end.
And then they can just more broadly speaking on the phosphate business given the Mona is a key input.
Over the longer term I'm just curious how you think about decarbonising facets of the production process.
Any thoughts around green ammonia and how that might factor into your thinking going forward. Thanks.
Okay. Thanks.
Let me, let me start with our potash.
If we look at the.
Expectations on potash this year I'd start by saying the North American demand appears to be very strong and thats one of the gain areas, Brazil will be strong.
We're expecting record use of fertilizer in Brazil.
It seems year after year.
We're seeing a big.
Rebound, let's call it in southeast Asia, particularly Indonesia, Malaysia with their their palm oil, but all the way across southeast Asia, all the way across the Asia, we're seeing good demand.
And again, the probably the only place where it'll be flat.
Year on year is probably going to be India.
And although we expect a decrease in phosphate use we sort of expect about of flat youth and in potash. So overall that would be the those would be the drivers and if those do better we could get up to the 71, otherwise, we'll probably be more in that 69% to 70 range is kind of our base case.
In terms of Decarbonization, if you will we've set some fairly aggressive ESG targets. We've said, we would reduce our greenhouse gases by about 20% are from.
Sorry, we would increase decrease or the greenhouse gases by 20% of lot of what we're doing there involves how we're running our phosphate businesses, we've put a lot of effort and resources into.
Two how we can use recycled heat to make power.
Power.
And over time, we see that along with just other users to use less power.
The et cetera in terms of the nitrogen.
I guess of couple of the nitrogen producers are talking about green and blue nitrogen.
At this stage those really haven't got to the market yet.
I would assume that if we can buy a lower.
Intensity carbon intensity nitrogen for our usage ammonia for our users we would certainly.
Go that direction.
Thank you we don't have any question as of the moment from the queue. Please go ahead of the centers.
Yes, so thank you everyone.
Yeah.
Yes, we're going to give you back a little bit of time, but let me just close by saying we.
What we're seeing today is the culmination of all of the effort we've put into for a long time and now that these markets have started to move forward.
We're starting to really reap that benefit and we see that strength going well into the second quarter and through the rest of this year, so with that have a safe and productive day and thank you very much for listening.
Thank you. This concludes today's conference call. Thank you all for participating you may now disconnect.
[music].