Q3 2022 ZIM Integrated Shipping Services Ltd Earnings Call
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[music].
Ladies and gentlemen, thank you for standing by.
I mean, your chorus call operator.
Welcome welcome and thank you for joining system integrated shipping service Q3, 'twenty through 'twenty two earnings conference call.
Today's recorded presentation, all participants will be in a listen only mode.
Presentation will be followed by a question and answer session.
If you would like to ask a question.
Press Star followed by one on you touched on telephone.
Chris This all key followed by zero for operator assistance.
I would now like to turn the conference over to Ilana Hoffmann head of Investor Relations. Please go ahead.
Thank you Irene and welcome to Zimmer <unk> third quarter 2022 financial results Conference call.
Joining me on the call today are indeed, Mcmanus president and CEO .
Yeah, just feels as CFO .
Before we begin I would like to remind you that during the course of this call we will make forward looking statements regarding expectations.
Predictions projections or future events or results, we believe that our expectations and assumptions are reasonable we wish to caution you that such.
Statements reflect only the company's current expectations and that actual events or results may differ including Europe .
You are kindly refer it to consider the risk factors and cautionary language described in the documents the company files with the Securities and Exchange Commission, including our 2021 annual report.
Bob on form 20-F on March 19, 2022, we undertake no obligation to update these forward looking statements at this time I would like to turn the call over to Jim CEO Liam Kelly.
Thank you Linda and welcome everyone.
That's cool.
<unk> third quarter and nine months performance reflects continued solid execution.
<unk> financial results and profitability these results.
Consistent with our expectation or marketing organization beginning in the second half of 2022.
Following an extended period.
Pete.
Although the class two bandwidth.
The decline in pricing than we previously assumed.
As consumer demand in the U S and elsewhere.
So there is no normalization.
It's accelerated embed some of this before.
You can vote.
So for me it went to 22 broker.
For 2022 we now expect to generate adjusted EBITDA between seven to 734.
Seven $7 billion.
Compared to previous guidance of seven.
Sure.
Vivian.
And adjusted EBITDA between $6 billion to six.
Vivian.
Back to the previous projection of $6.
It's weird to six 7 billion.
No.
It's on the comp guidance once it went into adjusted EBITDA.
Adjusted EBITDA is expected to be once again, all time records.
Current market condition.
You illustrate the bullets.
But the nature of our market.
The outlook outlook for the global economy is very uncertain.
We see both macroeconomic and geopolitical news rising inflation and interest rates.
Would you guys have seen your next.
The extended warm in Ukraine.
Yes.
It's generally the spending is done and now in consumer spending and services.
Turn to normal demand for durable goods.
You've been public.
All these challenging open for container shipping, particularly.
Given the schedule of vessel deliveries planned for next year in 2020.
So good Oh CFO .
Bob will discuss our guidance and the current market environment in greater detail later on the call.
And the potential impact of these things, but including <unk> 2023 on our business.
So dividend policy to pay 30% of quarterly net income our board declared.
The Q3 dividend ultimately really hungry.
<unk> million dollars.
2.9 right.
This year, we continued to return substantial capital to shareholders.
Which remains a priority.
We seek to create long term value.
Sure the two directly benefit foremost results.
So well.
<unk> gone through 2022 results and including this quarter it will be done over 126 billion.
So five five below shoe and dividend.
During the first nine months of this.
As you can see in slide number four revenue grew.
By 43% to $10 4 billion as compared to the same period in 2021.
Driven by elevated right.
The green shoots that strategy.
Adjusted EBITDA increased 55%.
Net income increased 43% compared to the nine months months period.
'twenty, one most importantly, while market conditions remain.
We continued to deliver strong EBITDA and <unk>.
Margins, highlighting our focus on profitability.
Nine months 22, adjusted EBITDA margin.
Improved 58% to six 3% and adjusted EBIT margin improved from 51% to 54%.
Notably our balance sheet balance.
Balance sheet also continues to be very strong with total shareholders equity of $5 8 billion dollar exam.
For the quarter.
In the third quarter of 2022, however revenue grew 3%.
Yes.
$3 2 billion.
And we generated.
Adjusted EBITDA and net income of $1 9 billion and one 2 billion respectively.
Does it need be done EBIT margin for the quarter was 60% and 48% respectively, though lower than in Q3 was at 21.
Turning to slide five in light of the fundamental changes in market condition. It is important to highlight the key elements of zoom strategy.
Commercial and operational agility.
We believe.
This adventure.
And then so positioned to operate in a more normalized rate environment.
Over the past two years.
Bill walked it to best position <unk> for long term success.
As we continue to focus on optimizing profitability for the benefit of all shareholders on slide five we made several initiatives.
Let's see.
Discussed.
Well on the commercial side, the global network of E Commerce, and New Zealand and <unk>.
Our focus on data.
Which is a very dynamic.
<unk> largest trade in volume terms.
And the expansion of our car carrier activity.
Which we intent to go even further.
We have demonstrated our ability to adapt to market conditions and capture commercial opportunities.
To date <unk>.
Commercial presence is model.
Russophile alone, allowing us to benefit.
Bye.
Balance between volume right now.
Yet we remain committed to our global niche strategy.
Operating trends, we won the most attractive.
Where we can establish a competitive position we believe this agility.
It provides us with significant resilience in this new market environment operationally, we remain very focused and secure the most competitive and efficient way possible.
Support our commercial strategy.
As a reminder, we aim.
Enter into our first agreement for the long term charter 10, 15000 Teu vessels.
2021.
These verses <unk>.
Hum.
On our call is just to use this service.
Charter agreement.
Positive impact on our cost structure negative.
We take delivery of the vessels without consequences.
We also expect to beat the sales line.
Fly now to operate the LNG vessels on this thing.
Hopefully in June an important commercial differentiation.
Anything to immediately reduce the carbon footprint.
<unk>.
And its customers most recently.
We enter into an important agreement with shell to secure the supply of LNG and efficiently bunker this vessel.
From our digital investment I would highlight the progress of ship for our digital plate probable.
Which we launch about a year ago as a reminder, Q4. The Q did you touch solution on the form 10 Bakken.
Targeting Smes on the U S and Canada shipping from China, and Vietnam. This capability offers seem important efficiency compared to other industry players.
While ship for steel is very modest revenue at this time.
Technology as well.
So and the potential in this multi billion market is clear.
On that note I will turn the call over to our CFO Cynthia for his remarks on our financial results and additional comments on the market.
Yeah.
Thank you Amy and again welcome everyone.
On slide six we present, the financial and operational highlights.
Our third quarter results reflect continued strong execution and the benefits of our differentiated approach.
Combined with higher quickly.
It's typically our average length of Teu of $3263 in the third quarter was 4% higher compared to the third quarter of 2021.
During the first nine months of the year average freight rate was 43% higher than in the 2021 nine months.
Our current what do you mean, the third quarter declined 5% compared to the same period last year.
Lower volumes during the third quarter resulted primarily from continued congestion as well as more normalized level of consumer demand.
Over the nine month period, our current volume was down 3% compared to approximately two 5% decline in the market.
In the first nine months of 2020.
We now anticipate our carrying value will be slightly down in 2022 on a full year basis as compared to 2021 that is due to softer demand and continued congestion.
Our free cash flow in the third quarter totaled one 6 billion.
Compared to $1 7 billion in the third quarter of 2021.
Our cash conversion rate remains strong at 84% as compared to last year's Q3 cash conversion rate of $83.
Turning now to our balance sheet total debt increased by $1 4 billion as prior year end.
As in recent quarters. This was mainly driven by the increased number of vessels fixtures.
Time charter duration as.
As well as higher daily charter rate.
The first nine months of 2022, our cash bank deposit and investment increased by $300 million.
Beginning with our fleet the number of vessels, we tend to operate Hasnt changed from our last report.
And Cherokee stands at 149 vessels.
Of which 10 o'clock hour.
The average remaining duration of our current charter capacity is 27 four months.
For the $28 six law this 2022.
In bridging our first operated capacity to their scheduled delivery.
Our chartered Newbuild vessels throughout 2023 and 2024.
In 2023 25 vessels out for renewal.
<unk> Expo and you all know in 2024.
This means we have a total of 62 upcoming therefore for when you will compare to the expected delivery of.
46 chartered newbuild vessels during the period.
Moving on to slide seven you can see that we delivered very strong results over the last two plus years and our net leverage ratio as a result have trended downward at the same time and is at zero.
As of September 30.
On slide eight turning to our three and nine months financial performance.
Differentiated and proactive approach has continued to yield.
Profitable results.
Revenue for the third quarter was $3 2 billion.
At 3% as compared to Q3 2021.
While net income.
Was $1 2 billion compared to $1 5 billion in the comparable quarter.
Adjusted EBITDA was $1 9 billion for the quarter compared to $2 1 billion last year.
Reflective, reflecting more normalized volumes and average ticket.
While market dynamics have shifted <unk> continues to generate strong EBITDA margin.
Nine month margins were 53% for adjusted EBITDA of 54%.
For adjusted EBITDA.
This compares to 58% and 61% respectively in the same period last year.
I would like also to note that our lower market in the third quarter were driven by higher slot costs, resulting from a higher better due to the transition to our own operated capacity. Following the termination of the slot purchase agreement, we had with the two way, although it looks worse.
Coupled with our top.
Higher Edison battery.
Turning to slide nine we carried 842000 to use in the third quarter compared to 884000 Teu during the same period last year.
As you can see illustrated in the slide lower volume on the transpacific caused by softening demand and continued effect from congestion in east coast ports.
Was partially offset by growth in intra Asia, Latin America and Crossways.
Intra Asia in particular is a key focus for us and we do believe increasing segments with this growth rate will provide us with significant resilient as market conditions normalize.
Our cash flow bridge.
We ended the Q3 2022 with a total cash position of over $4 billion.
Which includes cash and cash equivalents and also investment bank deposit and other investment excuse me.
During the first nine months of the year, our adjusted EBITDA of $6 6 billion converted into 5 billion cash flow from operations.
Other cash flow items included 293 million of net Capex.
$1 billion of debt service most of the lease liability.
And dividend distributions of $2 9 billion.
Moving to our guidance as already mentioned with the pace of globalization accelerating we have revised our full year 2022 forecast.
We now expect to generate in 2022 adjusted EBITDA between seven four to $7 7 billion.
EBITDA between six to $6 3 billion.
That is approximately 5% lower from an EBIT perspective.
Our previous guidance based on the midpoint of the range.
Our underlying assumptions for our revised 2022 guidance reflects the steeper declines in spot freight rates.
And softer demand as discussed.
In addition to adjusted contract rates.
Again, we now expect our salvage volume to be slightly lower in 2021.
On the cost side, we assume a slightly more favorable charter rate environment, though the impact marginal given the limited number of charter with you.
With that said it is worth highlighting that this year.
Reflect full year record high.
Turning to our view on the bike market environment, the supply even balanced forecast shown here reflects lower demand growth assumptions for 2022 and 2023 in light of the worsening macroeconomic environment.
With the order book to split ratio Terence.
Approximately 27% of which $2 3 million Teu are scheduled for delivery in 2023, and another $4 7 million Teu scheduled for delivery.
The $40 the following year.
Supply growth is expected to be considerably greater versus demand growth than previously projected.
The combination of weaker demand falling quickly can de risk of oversupply created a challenging business environment for container shipping.
Yes that would be kept why derrek market dynamics made back effective supply and create a more stable business environment in the quarter.
<unk>.
Next week.
The mirror image of the decline and frankly, the cooling off of the charter market.
The charter market is also returning to more normalized conditions.
As you can see here charter rates have significantly dropped and overall supply is tight.
Options to secure chocolate or shorter term duration.
Gradually coming back.
The other fleet has also slightly increased.
As we have indicated in the past our view is that effective supply growth may be smaller than is implied by the current order book due to the various factories.
That are being detailed here on this.
Slide 14.
In 2023 Port congestion limited terminal capacity lapsing less that infrastructure will continue partially offset.
Yes.
As well as possible slows TB, resulting from <unk> 2023 regulation.
Which are going to effect in January next year.
Our 2023, and the decarbonization agenda, but also looking at languages to retire older vessels, resulting breakfast coffee and offsetting some of the new blade capacity.
They also result in lower supply growth.
Louise Cherokee, suggesting that the all of the approximately 60% of the deliveries will be on site in <unk>.
In Q3, and 55% in 2000 for Q4.
As both carriers and shipyards may want to postpone delivery.
As the former are facing weaker demand and the latter are facing higher costs.
Like they're adapting deployed capacity to demand signs of which we have seen in recent weeks. They also support industry efficiency.
On that note, we will open the call for questions.
Ladies and gentlemen at this time, we will begin the question and answer session.
Anyone who wishes to ask a question My press Star followed by one on the Touchtone telephone if you wish to remove yourself from them.
Q.
Star followed talk to.
If you are using speaker today, please lift the handset before making a selection anyone who asked the question My press Star one at this time.
One moment for the first question please.
Okay.
Our first question is from of.
Jefferies. Please go ahead.
Hi, Thank you, Hi, Ely and BW here in Nevada, and good afternoon.
I am just wanted to ask about liquidity and your cash position today, you've obviously got a pretty sizable amounts of four 4 billion at the end of the quarter.
Which is over 35 Bucks a share.
Sort of in line with it or not.
Alright.
Our liabilities.
But just in general I wanted to ask how do you view your current cash position is that a comfortable amount.
That you're carrying now with all the uncertainty out there in terms of the outlook.
In the market.
Are there any levers to pull or youre thinking of pulling in order to make the rates even more cash.
Comment.
Cash position.
Omar.
We are very pleased that the balance sheet is strong at the time and meet where the market is entering into.
It's all musicians safe and so having a very robust capital structure is a very good position to be as there we are.
Experienced.
Sure.
In the market.
There's a lot of uncertainty today as to where where the rates with <unk>. When the normalization that will that will eventually end and we will obviously ourselves. The question when we come to that point as to whether we have we believe that the extra extra cash relative to some other project or almost.
Today, the capital allocation priority continues to be at the same as before which is ensuring we continue to invest in growing our commercial prospects securing capacity are renewing our fleet of equipment.
We continue to look also at options to potentially.
Grow inorganically and look at potential M&A M&A transaction that is something that we'll continue to look to do even though there is a.
There is no rush to secure anything in this respect and lastly, and very importantly, we want to continue to be true to our commitment to our shareholders, which is to return significant capital back to them.
Okay. Thanks for that color and then maybe just on that final point, you were making about returning capital. How do you think about that dividend policy going forward I know the board ultimately is going to make the decision, but how do you think about the.
No.
Use of cash at the moment, given the softness in the market and that's a true up to that 50% payout next quarter for the full year of 'twenty two does that make sense or do you think sticking with 30%.
More in line with your thinking.
You know at this stage what has been very important to the company is to stay where we tend to do and execute on what we said we can live with.
<unk> been consistent in that approach I think since the first day of being a listed company and we have logistic optimal location.
Our dividend our dividend policy, but today this quarter, we have continued to be true to our announced 30% dividend payout.
I think when it comes to what may be a discussion that the decision of the of the company.
In March when we release, our full year financial statement is there a little bit.
But premature today to opine as to whether we land at the consideration that will be.
Taken at the time would be obviously, a heartbeat vehicles the year, but also as importantly, what do we think the outlook is.
Is ahead of us and there is lots of unknown factor at this point, which again.
I think.
<unk> said it well.
Particularly mature to opine on what might be the <unk>.
And next year.
Okay.
That's fair and maybe.
Maybe just one final one.
Regarding the cost structure at the moment are there any levers to pull you think in terms of lowering.
Our run rate costs on some of the ships you have in house today, not not necessarily the new buildings with the vessels on the water at the $1 49.
And they have roughly 27 months left the duration.
There are there opportunities to maybe think about approaching the ship owners and lowering their base in exchange for added duration is that something that you're thinking of is that a realistic measure, but you guys.
We are undertaking.
This is always something that we can consider adding the shipowners are always willing to listen and engage with the charterer equal weight.
At least it could be for longer than we could revisit the commercial turf. So maybe this is something that.
That might happen in the future I think today, we are focusing on making sure that we extract as much cost as we can.
On the <unk>.
The way we operate.
The productivity level of each of the agencies were where people are obviously around the ground.
Is that the leverage our digital initiatives.
Also we believe will allow us to increase the productivity level.
And negotiating with the all of our suppliers not only the vessel suppliers at all.
The terminals that the rest of next year. So there is a lot for us obviously to two two to work hard in order to continue to try to extract as a limit.
The cost increase as much as we can.
Innovation that go in that going forward. So we focus on what we can control.
And.
And be ready for.
The new normal of next year.
Okay very good.
Yeah. Thanks for the color I'll turn it over.
Our next question is from Alex <unk> of Barclays. Please go ahead.
Yes. Good afternoon. Thank you for taking my questions I have.
Good day.
First.
Just on the <unk>.
Glide Q4, EBITDA guide of around $1 billion of virtually the exit rate from Q3. It has been quite strong, but clearly since the mid September with portrait.
Decline quite considerably how should we think about that.
First half of Q4 rest with the second half of Q4 just to understand.
The exit rate as we go into the next year.
And then secondly on them.
Comments about sort of unit cost IBP to change when we look at 2023 and the trajectory of sports right.
How can you protect debating what actions are you able to.
Okay.
Other than to basically reduce the capacity based on those.
Doug you have between the upcoming vessels and Dean.
And the ones that are expiring.
So yes. It does conclude thank you for.
So starting with your first question it is very true.
The pace of the.
Maybe you should look at the rate erosion of <unk>.
<unk>.
Index.
Decrease has accelerated over the past few weeks.
And so what the yes, the second part of the August quarter, it's been a country. So we have factored in in our Q4 assumptions that leads to the guidance.
We communicated today.
A continuation of the trend to some extent and so we expect Q4 average quickly to be less than what we delivered in two into Q3.
In addition to that from a volume perspective, we are also considering.
The two are getting.
Getting in the way there is of the 100 demand that is softening and as a result.
Yes.
As a company.
And also.
I think that.
The industry by taking.
Some actions in terms of additional density. So we have also factored in a bit more in the in the fourth quarter was explaining why the volume assumptions are a little bit lower than what we initially planned for.
To your second to your second question looking at what it is that we can do.
On our cost structure, we talked about.
The vessel cost we've been as you noted has been transitioning from that already over the past two years transitioning from being very exposed to the short term charter market gradually.
Contract that we signed that weaknesses.
To start with.
And ordered we have shifted towards being more exposed to long term charter in the years to come.
And.
We have experienced an increase in unit cost at <unk> this quarter and maybe even to the net.
In 2023 and beyond as we will take delivery of those newbuild capacity.
Cost per Teu.
Technically goes out in terms of the therefore, the cost of sourcing capacity.
In terms of variable cost also with the congestion.
Zinc.
Are going to incur less.
Cost.
A lot of equipment is going to be improved as well we are looking at how we can best optimize the usage of our fleet of containers today, we have close to 1 million Teu.
Capacity of <unk>.
Equipment and it is very possible that we will.
We deliver some of the older equipment.
The flow of cargo easy into 2023, so we will be more efficient in operating our fleet.
Okay.
And can I just ask a follow up on the first question in terms of the kind of split between the evolution and if we look at how I havent spoken with have accelerated.
I'd say the big Guy SKU.
Towards the first half of Q4, roughly two thirds one third if I just look at the kind of trajectory right.
Okay.
I think I'm not sure I understand your question I understand your question are you talking about.
The three months into into Q4, whether we expect a further reduction in in November and then a stabilization in the <unk>.
In December .
Yeah, exactly whether you would you expect most of the Brexit debate. Thank you Paul.
They come from October and November .
Black men December .
To date, we expect the.
The rates to continue to go down.
And also on the trade because.
We think that there are countries that have been there.
More exposed to the rates its valuation than others.
To some extent for example, the Atlantic is behaving.
Dave.
The U S West coast has been suffering.
More than the other trade Gainesville, So we need to look at the mix of trade, where we where we operate we still take the conservative view that.
The rig will continue to go down we see that the guide.
In terms of range is $300 million.
We obviously we.
Yes would it be sure to what would be the prevailing rates of the <unk>.
And we of the year, we know that.
What the rates will be in the in the weeks to come at the end of the year somewhat.
Also our Q4, our Q4 performance.
The boxes have reached their final destination by the end of the year.
The accounting rules.
Okay understood. Thank you.
Our next question is from strategic CEVA Kumar of Citigroup. Please go ahead.
Thanks again for the presentation I've got two questions here. So firstly on the guidance you did say that.
One of the reasons for that.
Additional guidance as lower contract rates.
If I understand right you got your contact credit exposures, mainly from Trans Pacific, which normally resets in <unk>.
So why does we are actually seeing the cloud lower contract great, Let's say Q3 versus your previous expectation.
Any color on that and also that externally like how much it it's actually come down.
Excellent.
Okay.
And the second one just on the satellite flexibility on supply.
You've made it clear that okay, you got about 60.
And on Taco Bell.
For renewal business.
What do you guys. Since you are taking in but that's more like say in two years' time that you've got a better.
Management.
But into next year, given the uncertainties potentially.
Further don't dumb and dumber.
Mine what are the tools that you have in terms of like supply management actually going into next year. Thank you.
Thank you thanks Satish.
The question on the contract rates just to.
Yeah.
But that gives you perspective, yes, you're absolutely right that is very much relevant for the.
Transpacific trade Lane, where we operate and we normally contract 60% of our volume with a long term contract and remain close to the spot market or the other.
2%.
So clearly what what's happening with the.
<unk>.
The decline in the spot market on the some of the trade.
The spot market.
No.
Track rate and you may remember that initial.
Initially when we closed year contract season in April .
We close at elevated rates compared to what the prior year.
With that so there is a market in terms of the rates that went down and the cross at some point in the quarter.
With that in securities with our customers.
More importantly from a customer perspective.
It was not there and the volume was that was not there. So we have to leave with is a new reality and.
<unk> engaged with our customers.
There is a lot customer for one year.
One season, they are recurring customers with whom we have enough term relationship and we intend to continue to have a long term relationship. So clearly.
As the spread between the contract rate in terms of dollars per Teu.
And the asphalt was increasing.
We had debt to sit down and meet and reduce it.
The pricing for those customers.
We also protect to some extent some of this is what has happened we need to be pragmatic and make sure that we find the middle ground between the interest of that.
Our customers.
Our.
Your second question with respect to the supply side and the flexibility that we have and we still believe that.
We said that 25 vessels are up for renewal next year.
This is a significant amount that gives us the flexibility and also when we look at which are the vessel that we are.
But the delivery.
Next year out of the 46.
Tend to get between 23 and 24, when we get to 18 of those in there.
In 2023, and nine of them will be yet.
<unk> used the large capacity vessels that we intend to deploy on.
Asia.
The 90.
Fiber deep in it.
<unk>.
The 9000 <unk> thousand Teu.
We will be but we are eagerly waiting for those vessel he called.
There would be the most efficient what they will be peak capacity today.
Cost, which if I'm running the ship will be very similar allowing us to you.
Increasing it by 50%. So if we managed to increase the Ebix is will be an additional profit because of trade and if we don't it would be a neutral what obviously may happen depending on what the.
The market conditions are we are also another note in display as you know we generally operate listed have exceeded their software partners and debt.
There might be a source.
The discussions around global network I mean, there are a lot.
One option for us to entertain and consider as we go along into 2023 and take those deliveries of the ships.
Okay. Thank you thanks, David.
And then Helena okay. Thanks, so much.
The next question is from Sam Bland of Jpmorgan. Please go ahead.
Thank you Jamie.
The first one is on.
Excuse me.
From in terms of capacity.
Mark.
Q2, 2020 with blank sailings.
<unk> seen much of that yes.
It was not.
Surprising.
And the second question is if we look at.
All right.
Are there any lanes all regions.
Hi, Kurt.
Alright.
Below the breakeven.
Wonderful.
Okay.
Thank you.
Uh huh.
Hope I got your question right, you were a little bit breaking up but.
From what I understand.
First question was around the <unk> and whether we think that the.
More of a.
Ahead of us.
It's been over the past few weeks it is it is.
It is very possible.
The objective of the company as our goal remains the same we intend to be profitable the trait, where we operate and we don't wish to our sales capacity at a loss.
Yes.
The idea will be to mature that we always operate.
<unk> redeployed capacity rearranged the network of the tradesmen potentially are aligned where we operate in order to wait.
Physician, where we evolve Lindsay and money on a given voyage. So if there is continue.
To slide.
The level of planting will most probably continue to decrease over the coming over the coming weeks.
And with regards to your second question, which was.
Whether they are some trades, where we take the.
The spot rate has already across the.
Breakeven point from a profitability perspective.
In some trade we are not far from that in this year already across the across the line I was referring to earlier.
The trade between Asia, ULE, which has been a trend that has been a very severely did you one of the most.
We are severely impacted by the slide.
As you know on those places we operate.
Specific service via operates and expedited services.
Commanded premium.
On the <unk>.
Right.
But there is not much more room.
For the reduction in the in this region.
Is that something that still are quite resilient. The USC school has been a bit more resilient as well Latin America was very resilient in the quarter is now.
Sliding a little bit more so there is a difference in the pace of normalization, but eventually we think that all the trade.
That's helpful.
Understood Thanks very much.
This concludes our Q&A session.
Back to any glickman president MTS for closing comments.
Thank you zoom continues to deliver outstanding execution and profitable growth.
Elected in the third quarter.
Nine months 2022 for neutralism.
EBITDA.
EBIT margin remained strong.
<unk> cash generation has enabled Jean wood.
The $1 6 billion.
Slide five issued in 2000 22022 dividends.
While the pace of marketing monetization has accelerated over the past several weeks, we remain on track to generate 2022 adjusted EBITA VP.
This represents full year vehicles.
I would like to conclude by highlighting the team has been proactive over the last two years, taking significant steps.
So we made some resilience in our business.
<unk> zinc.
For the new normal.
Commercially we dealt with Diversifies, our business and the multiple growth engines.
We are also secure competitive efficient and cost effective new build capacity.
To support our commercial strategy.
Benefits of customer and shareholders. Thank you very much for human.
We look forward to reporting continued progress as a group.
Good.
Okay.
Ladies and gentlemen, the conference has now concluded and you may disconnect. Your telephone. Thank you for joining and have a pleasant day good bye.
Okay.
[music].
Sure.
Yes.
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