Q1 2022 GrafTech International Ltd Earnings Call
Yeah.
Good day, ladies and gentlemen, and welcome.
<unk> first quarter 2022 earnings conference call and webcast.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
And when you should require assistance during the conference. Please press Star then zero on your Touchtone telephone as a reminder, this conference call is being recorded.
I would now like to turn the conference over to your host Mr. Mike Dolan, Vice President of Investor Relations. Thank you. Please go ahead Sir.
Thank you good morning, and welcome to graph Tech International's first quarter 2020, 'twenty 2022 earnings call with me today are Dave Rintoul graphics, Chief Executive Officer, Tim Flanagan, Chief Financial Officer, Jeremy Alford, Chief operating Officer, and Quinn Coburn Senior Vice President.
Dave will begin with a review of our safety performance current industry conditions and demand for our products.
Jeremy will discuss our sales production and operational matters as well as give an update on our sustainability initiatives.
Tim will cover financial details and Dave will close with final remarks, after which we will open the call to questions.
Turning to our first slide as a reminder, some of the matters discussed in this call may include forward looking statements regarding among other things results performance trends and strategies.
These statements are based on current expectations and are subject to risks and uncertainties.
Factors that could cause actual results to differ materially from those indicated by forward looking statements are shown here.
We will also discuss certain non-GAAP financial measures and these slides include the relevant non-GAAP reconciliations.
You can find these slides in the Investor Relations section of our website at Www Digraph Tech Dot com.
A replay of the call will also be available on our website.
I'll now turn the call over to Dave.
Thanks, Mike Good morning, everyone.
Thank you for joining our first quarter earnings call I Hope you your families and your colleagues are all well.
We begin as we always do with safety health and safety Excellence is a core value of grass Tech is fundamental to everything we do.
People are our most important asset and giving health and safety right leads us to doing business right.
We are encouraged that our performance in this area continues to place us among the best operators in the manufacturing industry.
As we continue our journey to achieve our ultimate goal, which is zero injuries. We will remain steadfast in our efforts that we sent every employee home safely every day.
Now turning to an industry update on slide four.
While the near term operating environment for all businesses remains dynamic we are encouraged by the ongoing trends in the graphite electrode market continued strong demand has led to increased electrode pricing longer term, we expect demand trends to remain positive as electric arc furnace steelmaking, which is advantaged in terms of its.
<unk> cost structure operational flexibility and lower environmental footprint continues to increase its share of crude steel production relative to integrated steelmaking.
We also anticipate the demand for petroleum needle Coke a key raw material used to produce graphite electrodes will continue to expand in the coming years.
This reflects the increased needs for higher electrical demand.
Given the strength of the electric arc furnace steel industry.
In addition, needle Coke is used in the anodes for lithium ion batteries for the fast growing electric vehicle industry.
We view the growing demand for petroleum needle Coke is another positive long term trend for our business has higher demand will result in continued elevated pricing for needle coke and ultimately support higher sustained electrode pricing.
For these reasons grabbed tech substantial vertical integration into petroleum needle Coke represents a unique competitive advantage.
Turning more broadly to the current steel industry trends the overall overall fundamentals.
Remain generally solid first quarter global steel production, excluding China was essentially flat year over year, but capacity utilization rates continue to be healthy, particularly in North America.
In addition, steel prices remain well above historic levels, which will serve to further encourage the industry to maintain high utilization rates.
Turning to slide five for more specifics on our business.
Demand for our electrodes remains good and we remain committed to our provide.
Providing our customers with high quality products to meet their needs.
As I mentioned, our vertical integration is a key component of our strength and being a reliable supplier and a dependable business partner.
This demand for graphite electrodes has led to higher pricing for our products. Our average non L. T. A price rose 19% in the first quarter of 2022 compared to the fourth quarter of 2021 in line with our expectations.
This was on top of a 10% sequential increase in the fourth quarter.
We expect our average non LTA pricing for the second quarter to be consistent with our first quarter average.
Turning to our L. T. As we have updated our estimates for graphite electrodes volume and revenue under our L. T A's to reflect a timing shift between periods, resulting from the conflict between Ukraine and Russia.
We have provided force majeure notices with respect to certain L. T a serving customers in Russia.
As a result, we expect our contracted volume under the impacted L. T A's to shift out of 2022 and into the 2023 through 2024 period.
We expect to offset the majority of the resulting lower L. T. A volume in 2022 with higher non LTA sales, reflecting the ongoing demand in the industry.
Okay.
As we progress through 2022, our commercial team will be focused on leveraging our vertical integrated position, which makes us a key top tier electro producer that can provide our customers with security of supply.
No Jeremy will walk us through slide six.
Thanks, Dave we're pleased with the strong sales results that we generated in the first quarter, which were achieved despite a modest volume impact from the situation with Ukraine, and Russia that Dave just discussed.
We sold 43000 metric tons of electrodes in the quarter, which represents a 16% increase over the prior year.
Our first quarter shipments were comprised of 25000 metric tons of graphite electrodes under our L. T. A's at an average price of nearly $9600 per metric ton.
And 18000 metric tons of non LTA sales at an average price of just over $6000 per metric ton.
Net sales in the first quarter increased 20% compared to the first quarter of 2021, reflecting the higher volume and improved pricing.
Our production reached 46000 metric tons for the second consecutive quarter, an increase of 28% year over year as our plants continue to operate at high capacity utilization levels.
All of our manufacturing sites continue to be focused on further improving efficiencies.
And maximizing production given the robot robust demand for our graphite electrodes.
As the industry moves toward more U S. Based steel production, we continue to invest to meet the growing demands at this shift creates.
For example, our recent investments in the automated pin line that St. Marys continues to progress and helps to Derisk, our pin production capacity.
In addition, we're targeting select capital projects to support operational improvements at our plants to extract as much capacity as possible from our manufacturing network.
Prioritizing capital expenditures with the highest return on investment.
So now turning to slide seven.
Yeah.
Electric arc furnaces play a critical role in helping the steel industry reduce its impact on the environment.
And that's graphite electrodes are indispensable to the operation of electric arc furnaces, we're proud to be a key part of the solution.
Yeah, Yes, steelmaking produced a 75% less greenhouse gas emissions compared to integrated steelmakers.
In addition, our business in the ETF industry contributes to a circular economy as electrodes facilitate the recycling of steel as Eas are the largest steel recyclers in the world.
For these reasons Green steel as a critical element to the green economy can only be achieved through the ongoing shift to a S steelmaking, which requires that reliable supply of graphite electrodes.
As a leader in the electrode industry. These dynamics support our positive long term outlook on our business.
We take great pride in being a key contributor to the de carbonization of steel.
In addition to these broader contributions to the steel industry. We also continue to make good progress on our own key sustainability initiatives.
Most recently, we've established environmental goals, which will be highlighted in our next annual sustainability report.
These include a commitment for a meaningful reduction in greenhouse gas emissions.
To support this objective we continue to invest in capital projects that will further improve our environmental impact.
So now I'll turn it over to Tim to discuss our first quarter financial results on slide eight.
Thanks, Jeremy.
We are pleased with another strong financial performance in the first quarter with year over year growth in sales and profitability.
Net income totaled $124 million or <unk> 47 of GAAP earnings per share or <unk> 48 per share on an adjusted basis.
First quarter adjusted EBITDA of $170 million was $15 million higher than the first quarter of 2021 and resulted in adjusted EBITDA margin of 46%.
Cash flow continued to be strong in the first quarter as we generated $146 million of operating cash flow and $130 million of adjusted free cash flow a year over year increase of 20% for both metrics.
Like nearly all other industries, we continue to experience inflationary pressures on certain aspects of our business.
Consistent with our expectations provided on our most recent earnings call.
Cost inflation during the first quarter resulted in an approximate 9% increase in recognized cost per metric ton as compared to the fourth quarter.
We do not expect sequential cost increases the same magnitude as we proceed through the balance of 2022.
We are well positioned to effectively manage through this environment, reflecting our strong relationships with key third party suppliers.
In addition, <unk> substantial vertical integration allows us to manufacture a significant portion of our key raw materials petroleum needle coke at a relatively stable price, which is a major competitive advantage compared to our peers.
Turning to slide nine.
We further strengthened our balance sheet with a $70 million reduction in our term loan during the first quarter.
Building upon the $400 million reduction during 2021, and improving our debt to adjusted EBITDA ratio to one four times as of March 31.
Compared to one six times at the end of 2021.
We ended the first quarter with total liquidity of approximately $331 million, consisting of $85 million of cash and $246 million available under our revolving credit facility.
Turning to slide 10.
We anticipate solid operating and free cash flow for the balance of 2022 and.
And remain committed to delivering value to our stockholders through a disciplined capital capital allocation strategy.
This includes continuing to reduce debt to further strengthen our balance sheet and support our strategic flexibility. While also returning capital to our stockholders and investing in our business.
During the first quarter, we repurchased $30 million of our common stock and have $129 million available to us under our stock repurchase program.
In addition, we expect our 2022 capital expenditures to remain in the previously provided range of $70 million to $80 million.
As Jeremy indicated we will use these funds to support our high quality low cost global operating assets and to target high return of operational improvements.
Now with that I'll hand, it back to Dave on Slide 11.
Thanks, Tim.
In summary, we are pleased to have reported strong first quarter results, reflecting solid execution by the team.
As you heard we continue to be encouraged by the demand and pricing trends in the graphite electrode industry driven by the strength in global electric arc furnace steelmaking.
And we are seeing the impact of our reported results through higher pricing and higher quality earnings.
Over the long term, we expect electric arc furnaces will continue to grow their share of the global steel market.
You have some more cost effective and environmentally friendly process, representing an effective way to decarbonize the steel industry.
That's one of the largest producers of ultra high powered graphite electrodes in the world. We believe the graph to continues to be well positioned to capitalize on this trend and achieve solid long term growth.
We have a sustainable and long term competitive advantage from our low cost structure and vertical integration into our key raw material petroleum needle coke.
We have a proven track record of generating high quality earnings and efficiently converting our earnings strong cash flow.
We are committed to a disciplined capital allocation strategy that enhances stockholder value.
Well also improving <unk> financial profile.
Thereby giving us flexibility to successfully operate through industry cycles.
With the commitment of our people and our significant competitive advantages. We continue to strongly believe graph teck is well positioned to deliver results.
Stockholder value today and over the long term.
That concludes our prepared remarks, we will now open the call up for questions.
Thank you.
Ladies and gentlemen, if you have a question at this time. Please press the Star then the number one key on your Touchtone telephone.
If your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
Okay.
Our first question comes from David Gagliano with BMO capital markets. Your line is open.
Okay, great. Thanks for taking my questions. You know first of all it's on the near term you know pricing flat quarter over quarter in the second quarter.
Yeah, just based on the comments in the recent quarters I think that's based on you know kind of quote unquote spot sales that were done you know a few months ago that are now flowing through our results I was wondering if you could comment on the current pricing environment for spot cells, you know directionally spot prices for cells that are being concluded now for delivery during the second half of 'twenty two.
Two that's my first question.
Well good morning, Dave Hum Thanks for your question.
I think as you'll recall in the past we've indicated that we don't provide a guidance on pricing beyond the next quarter and that's been consistent since the time of the IPO. So we provided what we think is going to happen in Q2 and your thoughts around that are I think are correct.
Well I will refrain from providing guidance beyond <unk> and into the second half of the year.
Okay. Okay understood. Let me just try it a different way than you know in the past we've seen slowdowns.
And he you know when when we see a slowdown in E Bay Steelmaking you.
So in the past that has resulted in you know fairly meaningful inventory builds in graphite electrodes globally.
We have seen lately large shutdowns of Etfs in Europe and I'm. Just wondering are you seeing evidence of inventory builds now.
You are correct in that there is a regional aspect to the world as we know it right now Fortunately the American market is still running quite hard. So therefore on a global level I would say that it's a little early yet to a point.
To evidence of significant inventory builds on a global basis.
Okay Alright.
Switch gears here just a notch.
Not too long ago actually you flagged that a.
No graph tech is now considering potentially expanding its petroleum needle coke production and sell directly to the you know into the EV market and I was wondering if you can just give us an update on that process and any additional details.
You have at this point.
Yeah do you have anything.
What we commented on is that we were actively.
Actively studying.
<unk>.
You know options around that part of them.
Business World and whether it made sense for us to explore that and we continue to do that that work is ongoing and oh beyond that I cant report anything further but yes. The the study halfords around that kind of a thought process continue.
Okay. Just last quick question for me can you split out the L. T A's the 'twenty 'twenty three 'twenty 'twenty four volumes.
Or are you know lump together given that we're getting pretty close to 2023 year can you split between 23 and 24 in terms of how much is sold under a L. P. S. At this point.
No the change in the tables to reflect the movement of some material sum LTA material out of the current year.
And into that 'twenty three 'twenty four time period at this point in time, no I don't think we can.
Distinguish between those two years.
Yeah.
Okay. Thanks very much.
And our next question comes from Curse, Curt Woodworth with Credit Suisse. Your line is now open.
Yeah. Thanks, Good morning, Dave.
Good morning.
First question is just with respect to kind of what you're seeing in in Europe from sort of supply demand and your exposure into Russia. It sounds like you did take some volume maybe out of the L. T. A is for some of the business into Russia.
But Russia, I know and ergo problem, it's a fairly large producer and I think there was some we heard some machining of Chinese capacity in Ukraine. So just curious you know how do you see the European market.
Kind of developing and have you kind of changed your strategy with respect to how you're going to market given some of the issues in Russia and Ukraine.
Well first of all I would say that we you know we continue to obviously monitor that situation the sanctions et cetera.
And you know all the customers that are impacted by it.
With respect to the European situation I don't think the environment today is a we're not conducting ourselves different than we have in the past.
We can go over time allocate volumes based upon regional strengths and and pricing opportunities.
And we continue to do that today, the American market is running pretty well. So yes, we are selling.
Selling them you know more into that.
Market, but.
You too.
No balance our commercial portfolio based upon.
And what are the best opportunities are.
Okay.
And then on the needle Coke side.
<unk>.
Can you talk a little bit more about.
Demand uptake from the E V ended market, obviously PSX announced their deal with robotics and then there's been some discussion around.
British bolt in the U K take more needle coke as well from PSX. So yeah.
Do you have any.
You know data or can you quantify kind of what what you think the opportunity set is in terms of how much needle coke could be going into the EDA market in the next couple of years and then with respect to your study at Seadrift.
You know, what's the timing around that.
Would you expect that you know by the end of the year, we'd have an update on that.
So you know as I mentioned to Oh, Dave on your on the earlier question he had.
We do believe that there is a reason to look at that market and we are.
I'm doing a putting a fair amount of effort and energy into evaluating the opportunity. It would be premature for me on this call to quote any other statistics in and the outcome of that what we're finding so far other than to say that we're continuing to study based upon what we have.
Oh looked at heretofore. So we're continuing to move forward with the evaluation and we'll be.
Discussing those opportunities with our board and depending upon those outcomes. Then we'll report back on these calls in the future as appropriate.
I think it's reasonable to expect that.
There'll be more to say one way or the other by the time, we get to the end of the year certainly.
Yeah, Curt I would just add on the needle coke side as well as you think about what we're seeing in the market today from a pricing perspective versus what we talked about in Q1 resident in our conference call earlier in the first quarter for Q4.
You have seen a couple of hundred dollars increase in prices based on an important data. So you're you are in that 90 to 120 $500 range on average so youre seeing a little bit of price appreciation on a needle coke side now it's hard to say how much of that is really related to EV demand, but I think if you look at.
Kind of a broader statistics outside of kind of what they were speaking to.
You know I think the overall expectation for EV demand on needle Coke over the next couple of years could come in line our parallel what graphite electrode demand is so somewhere in that 700 to 750.
<unk> thousand and taught.
Range. So we still think there's a pretty substantial amount of.
The opportunity out there from a needle coke perspective in terms of EV demand.
Okay, and then maybe just.
You know on on the pricing outlook I understand that there's you don't Wanna comment, maybe specifically for competitive reasons, but.
You know typically I think a lot of a lot of the swap book is more sold on sort of six month type contracts. So I would assume that you have a decent amount.
Of your volumes for the back half of the year.
Somewhat settled at this point I mean directionally.
Should we expect that your your non LTA pricing will continue to trend higher in the back half of the year relative to the first half.
Is that fair.
I think it's fair to expect it will trend higher however, I would be remiss, if I or incorrect if I tried to quantify that for you.
Okay, Thanks, Ron correct, but directionally you're correct.
Thank you.
Again, you've seen one of them.
I'd like to ask a question. Please press star one on your Touchtone telephone.
Your next question is from Arun Viswanathan with RBC.
RBC capital markets. Your line is open.
Great. Thanks for taking my questions hope you're well.
So I guess first off.
Just on the electrode pricing. So you know it looks like you.
You have 40 to 50000 tons for the out years I'm still on L. T. A.
You know you've noted that the market in America is is relatively robust.
I guess could you elaborate on that are your customers coming to you with them you know any kind of desire to extend the contract terms or secure a little bit more electric volume.
What specifically would lead you to believe that the market's robust.
So uh huh. Thanks for your question Arun.
As I've indicated in previous calls our expectation around the.
Applications of L T A's.
For 2023 and beyond those those discussions would typically began early in the third quarter of this year and that's that's kind of been in that kind of how it's been our position for some time now and we don't see anything.
Any evidence that that's going to change certainly we've had a few people you don't talk about it but we don't we do not expect nor did we expect.
Any serious discussions to commence until early third quarter of this year.
Okay, but and then so I guess maybe.
Said differently.
You know you you provided a little utilization rate globally at 72%.
You know obviously rates are higher than in the Americas.
You know, but you know what are some some trends maybe some drivers that lead you to believe that those will continue at higher than global rates are in the Americas, I guess and.
You know are you are you kind of excited about are encouraged by the infrastructure bill potential.
You're seeing it because of automobile automotive obviously.
It's a little bit challenge with some supply chain issues, but I guess, maybe if you can just help us with some of the end markets.
You know as you see it I'm sure you do track some of these things so.
Yeah, I mean, do you expect utilization rates to kind of remain say mid eighteens and the Americas or what are you kind of hearing from your customers.
So the answer your question is that yeah, we do believe that the American utilization rates will.
Remain at solid levels I don't think we're gonna be brave in this call does spell out an exact number but certainly over the last year they've been at a pretty healthy numbers and we think that yes, the infrastructure build and the movement of the administration to require they're still to used in the infrastructure.
<unk> projects that should be American made or it is helpful to continue that work.
And those are the kinds of things along with the.
The announcements of additional electric arc furnaces being built across the North American.
Geography is encouraging clearly those folks that are building these furnaces and adding an electric arc furnace capacity.
Have a belief that the and as we do that the steel demand will be such that that demand.
New furnaces as required and we expect to supply.
Those customers because literally all of them are current customers, so that bodes well for our.
<unk>.
Demand in that respect.
And then on a more a few years out you know the.
Requirement in Europe to move towards a more green footprint will inevitably see more eas built in a number have been announced as part of the green projects.
And we expect that will continue.
Okay, and then I did have a couple of questions around China. So you know number of companies.
I've indicated that.
You know with some of these Chinese lockdowns.
You know.
China is seeing a little bit.
Lower domestic demand for certain products and so that is forcing our exports out of China and into other markets like Europe , and Latin America have you seen that within the electrode space.
I imagine that you know maybe some of the smaller Chinese electrode producers are exporting electrodes is that a fair statement.
Look the I think it's a little early on that front to see it in the import statistics because those statistics are usually a couple of months lagging on a reported.
In terms of the market itself I think were.
We're not seeing a certainly a big change yet I would suggest that while the lockdowns effect certainly their steel industry. They also affect the suppliers to the steel industry.
So the graphite electrode industry within China, there's no doubt affected by the same lockdowns.
So.
We're not seen any.
Meaningful shift at this point.
Yeah.
Yeah, and maybe the two things I would add just with respect to the Chinese.
One don't forget that the markets that we predominantly sell to our North America and Europe will have.
Protective measures in place in Europe , just renewed you've just renewed their antidumping measures against Chinese electrodes.
Well as there were some announcements or at least some news articles anecdotally last week around infrastructure.
Projects in it infrastructure package that the Chinese government announced again too to ensure that their economy keeps humming along at the pace that it has over the last few years so agree with.
And as Dave said, but just had those two points.
Okay. Thanks for that and then back to the pricing discussion. So you know needle Coke and now has moved up I think a year ago. In Q1, you were at 1300 dollar per ton level, you know it looks like.
You're seeing some you know you know pricing in the in the 1900 to 2000 level.
And so you know in spite electrodes I guess or at that.
Three times, you know a range, it's a $6000 a ton.
I know you don't want to speculate on future movement, but are those the right ranges that you're seeing right now and then.
Along with that you know hot rolled is kind of you know moved off the peaks of 2000 bed seem to see me.
Mean needs settling in a in a 1400 dollar per ton range.
What do you expect I guess for hot rolled if if if you can comment on that I I know, it's volatile, but you expect hot rolled prices to kind of remain in and these elevated areas or do they revert back to kind of historical norms in the $410000 per ton range as new capacity comes on.
Well Rune I I don't think that I'm gonna take a run at projecting what's going to happen to Uh huh.
Hot rolled prices other than to point out that even in their current form which is still at historic highs the margin or scrap is still pretty pretty darn healthy and explains why you know.
People like our new coordinators T. I R are doing quite well.
And we think that.
You know the current environment as we see it.
Encourages them to run at.
Good operating levels of why we see high utilization rates.
And I think it's it's more importantly about again the margin.
There are getting so even if there's some adjustment I would expect then there would be an adjustment to scrap and margins would be still pretty healthy. So we're that's why we're still optimistic.
Yeah, and just to clarify one point I think you said 1900 to $2000 on needle Coke.
19, <unk> hundred on the low end, depending on the grade in the up to $2500.
And again, that's based on important statistics that are probably about a month dated at this point in time, but she was seeing some upward movement compared to what we talked about a quarter ago.
Okay. That's helpful.
Thanks for that and then just a couple of questions I guess around the balance sheet and cash flow. So.
Again robust cash flow free cash flow in the quarter, you know it looks like you're calling for capex of only.
You know $70 million to $80 million this year.
So you're you're gonna have you know significant amounts of free cash flow problem, you know definitely north of 400 million, maybe 500 millions of $200 million.
That range you know the the leverage really isn't that.
Stretched a you've done some work to bring that down.
You know, maybe theres, a little bit more liquidity out there now with Brookfield, our position being lower but how do you. How do you plan to kind of spend that free cash flow.
And you know it is bringing the leverage down really the optimal use of it if it would be considered that you know.
Again, you're you're not really as high as they used to be on an on your on your leverage levels.
Sure Arun things, Oh, I'll take that.
Yeah again as I said in our prepared remarks, we're committed to delivering value to our stockholders through a disciplined strategy and it's something that we discussed with the board on a regular basis.
We said in the fourth quarter as well that we had some work to do on the balance sheet, despite repaying $400 million of debt in 2021.
We took another chunk down in Q1 of this year $70 million, but we'll continue to focus on maintaining a strong balance sheet, because I think that not only.
Is that prudent for our industry, but I also think that it's a it's a good interest or the best interest for our.
Our shareholders and stockholders alike.
I think it gives us a lot of flexibility as well strategically as we think about what opportunities lie in front of us as a business. So it's an enabler for us to to grow the business and think forward.
That being said, we continue to evaluate what's the best use of our capital again that being the mix of internal spending on operational projects and capex as well as returning.
Capital to stockholders as we did in the first quarter with the $30 million of buyback that we did so well continue to evaluate it but yeah. Those are a few thoughts for now.
And then just on that.
That deployment of capital so or are you also looking at inorganic growth I mean is there opportunities to consolidate them within electrodes as there are opportunities to expand inorganically on the needle coke side.
You know what any of those kind of options makes sense as well.
Look we've done a good job I think in positioning the balance sheet now to a place where I'm sure. They're an inorganic opportunity present itself, we can seriously evaluated and like any other company will continue to do those things and keep our ear to the ground.
And we'll see what unfolds with that in combination with our organic opportunities.
And just last question was.
David I know I think you're.
We're gonna be retiring soon so is there any update you can provide on that.
This search.
For a successor and whats the board kind of considering and what timing, we should kind of keep in mind. Thanks.
Sure well look as we noted.
When we announced my retirement.
The board is conducting a global search for the new CEO and when the process is concluded then we'll make an announcement has that timing is appropriate.
Really all I can say about it today.
Okay. Thanks.
I am showing no further questions at this time.
I'd now like to turn the conference back to Mr. David Rintoul for closing <unk>. Thank you.
Thank you Katrina I would like to take this opportunity wish everyone on this call health and safety in the coming months. Thank you for your interest in grab tech.
We look forward to speaking with you in the next quarter.
Thank you.
Thank you presenters ladies and gentlemen. This concludes today's conference. Thank you again for your participation and have a wonderful day you may all disconnect.
Okay.
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