Q2 2023 AerCap Holdings NV Earnings Call
Please standby we're about to begin.
Good day, everyone and welcome to the Aercap Holdings N V second quarter 2023 financial results. Today's conference is being recorded and a transcript will be available following the call on the company's website at this time I would like to turn the conference over to Joseph Mcginley head of Investor Relations. Please go ahead Sir.
Thank you operator, and Hello, everyone.
Come to our second quarter 2023 conference call with me today is our Chief Executive Officer, Angus Kelly, and our Chief Financial Officer, Pete U S.
Before we begin today's call I would like to remind you that some statements made during this conference call, which are not historical facts may be forward looking statements forward looking statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements.
<unk> undertakes no obligation other than that imposed by law to publicly update or revise any forward looking statements to reflect future events information or circumstances that arise after this call.
Further information concerning issues that could materially affect performance can be found in <unk> earnings release dated June 30th 2023, a copy of the earnings release and conference call presentation are available on our website at Aercap Dot Com. This call is open to the public on this being webcast simultaneously at Aercap com and will be archived for replay we will shortly run.
Through our earnings presentation, among a lot of time at the end for Q&A as a reminder, I would ask that analysts limit themselves to one question and one follow up I will now turn the call over to Angus Kelly.
Thank you Joe.
And thank you for joining us for our second quarter 2023 earnings call.
I am pleased to report another quarter of strong earnings for Aercap generating adjusted net income of $596 million and adjusted earnings per share of $2 50 success.
This reflects widespread demand for our assets strong cash collections and our constant focus on execution.
As a result, I am pleased to update our earnings guidance for the year to a new higher range of $8 50 to $9.
This includes gains on sale of approximately $1 in the first half of the year.
Given the strength of the business and consistent cash generation.
I am also pleased to announce another $500 million share repurchase program.
This takes total authorizations, so far this year to $1.5 billion.
Over 10% of our market cap at the beginning of the year.
This commitment indicates our confidence in both the outlook for the business and the value we see in Aercap today.
As I mentioned demand for aviation assets continues to be robust.
Which is reflected in our significant levels of activity in Q2.
Over the last three months, our platform executed 215 transactions across aircraft engines and helicopters.
This comprised of 124 lease agreements thirty-two purchases and 59 sales.
Of note in the period was the continued strong demand for current technology aircraft.
Where we signed a large number of lease extensions as <unk>.
Airlines up to keep whatever capacity they have in the air.
Likewise, all of the aircrafts sold in the period were current technology units with around 40% of these sales going to airlines.
I believe the shortage of aircraft and the system has also helped to airline profitability.
As it enforces capacity discipline across the sector, resulting in healthy yields.
Our customers are in general in good health at the moment and optimistic about the future.
On the engine side demand for spare engine remains high in the face of higher aircraft utilization, new technology durability challenges and part supply constraints at the M. A rose.
We are helping our customers through these challenges by providing financing and spare engine support through our Aercap engines franchise business and S. E S. Our joint venture with Safran.
The engine team continues to invest in the most fuel efficient engines as well as recycling older technology engines into the spare parts markets combined with a healthy level of sales activity.
Switching to the industry overall.
I think will be helpful to elaborate on how strong the demand environment is in comparison to the supply available in the market today.
For this I believe it's useful to provide some historical context.
So I'm going to refer back to 2018 when demand was fairly good in all regions of the world and the Oems were delivering aircraft close to the scheduled delivery dates.
Widespread disruption began in 2019 when supply was severely impacted by the grounding of the 737 Max.
Even as flights grew by about 2%.
The following year, both demand and supply fell sharply.
As COVID-19 spread around the world.
Then we saw a consistent recovery in demand taking us to June 'twenty, 'twenty, three where we've recovered to approximately 90% of 2018 levels.
OEM deliveries also recovered in this timeframe.
But only to around 73% of 2018 levels.
As you can see from the chart they've continually lag demand in the period.
Leading today's widespread aircrafts shortages.
This is particularly important when we think about the persistence of the situation today.
And why we believe this supply demand imbalance will last for several years into the future.
The engine bottlenecks in the OEM and MRO will not be resolved for a number of years as fixes have yet to be agreed for the engine durability issues facing the newer technology narrow bodies.
And even then it will take several years to rollout any new fixes across the fleet.
I also don't believe a scenario.
And which passenger yields softened due to a mild European or U S recession would derail this dynamic.
As the positive momentum from Asia emerging out of Covid restrictions is getting underway.
Remember that when airlines consider fleet planning they.
They do so in years and decades not weeks and months.
As such short term disruptions don't really impact them out.
They to know that the supply issues are going to persist.
They continue to look to secure aircraft to meet their growth plans.
The chart on the right hand side shows just have acute change in supply has become.
With the normalization of storage rates of new technology aircraft.
This occurred as a result of the global reactivation of aircraft.
Storage rates today would be even lower if it wasn't for the reliability issues around the new engine technology.
So taking that into account we are close to zero today for what I would term discretionary storage.
With this avenue closed and.
And demands continuing a pace the leasing channel is the airline's best source of near term lift.
On the sales side.
We continue to see strong.
And broad based demand for our assets closing 818 million of transactions in the quarter.
This resulted in our highest ever quarterly gain on sale of $166 million.
Which represented a 25% margin.
Encouragingly this was not confined to aircraft assets. We also saw strong gains in our engine and helicopter sales with record volumes in each category.
This further confirms the benefits of the asset diversification Aercap now enjoys.
The operating performance of the core businesses.
Allied to our aircraft trading activity generates significant amounts of capital, but this is only one half of the equation.
The other half.
Is that we must also allocate your capital effectively.
In that vein, we've continued to take advantage of the dislocation.
Between private market professional aircraft purchasers.
And the value implied in our fleece by the public equity markets.
The book equity from the assets, we sold in to Q.
It was 176 million.
We generated 166 million in gains on sale by selling the aircraft above book value.
In addition, we generated a further 65 million of equity from repurchasing approximately $300 million of shares at an 18% discount to Aercap book value.
This meant we more than doubled our equity value by selling aircraft are both book value and.
And buying shares below book value all the while improving the overall quality of our portfolio.
So in summary, this was another great quarter for Aercap with broad based demand for our assets and focused execution generating strong earnings and cash flows throughout the business.
We continue to complete numerous transactions every day as our customers position themselves for continued growth in demand.
Our confidence in the future remains strong and we look forward to demonstrating this to you in the quarters and years to come.
With that I will hand, the call over to Pete for a detailed review of our financial performance and favorable outlook for 'twenty three.
Thanks, Gus good morning, everyone. We had a strong performance for the second quarter. Our adjusted net income was $596 million or $2 56 per share.
The impact of purchase accounting adjustments was $132 million for the quarter.
This included lease premium amortization of $41 million, which reduced our basic lease rents maintenance rights amortization of $29 million that reduced our maintenance revenue and maintenance rights amortization of $62 million that increased our leasing expenses.
In the second quarter, we recognized $14 million of recoveries related to the Ukraine conflict, primarily consisting of proceeds from engines that we recovered that were outside Russia at the time of the invasion of Ukraine that we sold during the quarter.
Taking all of that into account our GAAP net income for the second quarter was $493 million or $2 12 per share.
I'll talk briefly about the main drivers that affected our results for the second quarter.
Basic lease rents were $1.561 billion, an increase of $25 million from last quarter.
This reflected strong cash collections and we also continued to benefit from power by the hour rents from our lessees that are on PVH arrangements in their leases.
As I mentioned, our basic lease rents reflected $41 million at least premium amortization, which reduces our basic lease rents as I've mentioned before these premium assets are amortized over the remaining term of the lease as a reduction to basic lease rents.
Maintenance revenues for the second quarter or $156 million that.
$29 million maintenance rights assets that were amortized to maintenance revenue during the quarter.
In other words maintenance revenue would have been $29 million higher or $185 million without this amortization.
Net gain on sale of assets was a record $166 million for the quarter. We sold 52 of our owned assets for total sales revenue of $818 million and that resulted in a gain on sale margin of 25% as.
As of June 30, we also had $809 million worth of assets held for sale.
So we're on track for our sales target of two $5 billion for the full year.
As I mentioned earlier net recoveries related to Ukraine conflict were $14 million, which primarily represents recoveries related to a small number of engines.
Asset impairment was only $2 million for the second quarter.
Interest expense was $427 million, which included a $3 million benefit from mark to market gains on derivatives.
Our leasing expenses were $229 million for the quarter, including $62 million in maintenance rights amortization expenses.
Equity in net earnings of investments under the equity method was $34 million for the quarter again, reflecting strong earnings from Shannon engine support our engine leasing joint venture with Safran.
<unk> increased its fleet by 42 engines during the second quarter in order to build spare engine capacity for CFM and had an owned and managed fleet of just under 500 engines as of June 30th.
We continue to maintain strong liquidity position as of June 30th our total sources of liquidity or approximately $19 billion, which resulted in next 12 months sources to uses coverage ratio of 1.4 times, that's above our target of one two times coverage and represents excess cash cover.
<unk> of around $5 billion.
Our total operating cash flow was approximately $1 2 billion for the quarter and that was driven by continued strong cash collections during the quarter.
Our leverage ratio actually decreased from 2.56 times to 251 times this quarter, even after $1 4 billion of Capex and almost $300 million of share buybacks during the quarter. So that really shows the large amount of capital that aercap naturally generates each quarter.
Our secured debt to total assets ratio was approximately 14% at the end of June which is the same as last quarter.
Our average cost of debt was three 4% a slight increase from three 3% last quarter.
And during the quarter, we completed our most recent bond offering of $1 billion.
Our book value per share was $71 46 as of June 30, which represents an increase of 14% over our book value per share of <unk> $62 43 as of June 32022.
During the second quarter, we repurchased approximately $5 1 million shares at an average price of $58 54 for a total of $296 million and so far in the third quarter. We bought around 950000 additional shares for a total of $61 million. So we currently have $143 million remaining in the.
<unk> program is.
As Gus mentioned today, we've announced a new $500 million share repurchase authorization that will run through the end of this year.
As a result of the strong performance for the first half of the year and our outlook for the remainder of the year, we are raising our earnings per share guidance for the full year.
On the last earnings call I said that we expected to be at the upper end of our range of $7 to $7 50 for the full year, excluding any gains on sale and we are now increasing our range to $7 50 to $8 before any gains on sale of.
The outperformance is mainly driven by higher lease revenue both from strong cash collections as well as higher utilization of assets that are in power by the hour rents.
Most of those power by the hour arrangements will end later this year, but for now they're contributing additional revenue for us.
We've also seen a strong performance from the engine leasing business, including Ses, which has also been a driver of the outperformance relative to our original guidance.
During the first half of this year, we've had gains on sale of $265 million or <unk> 98 cents a share on an after tax basis.
So that's about a dollar a share and when you add that dollar to the new range of $7 50 to $8 you get a total EPS estimate of $8 50 to $9 for the full year and that does not include any gains on sale for the second half of this year.
So overall this was another strong quarter for Aercap, our financial performance was very positive mainly driven by higher revenues. We continued to see a very strong market for sales and produced our highest gain on sale ever.
We have $19 billion of liquidity and our leverage ratio is 2.51 times, which is further below our target and which is which gives us a significant amount of excess capital.
Against this strong backdrop and a supply demand environment that we expect to continue to be positive for some time, we've raised our earnings guidance for the full year and today, we've announced a new $500 million share repurchase program, bringing our total authorization for the year to one $5 billion and with that operator, we can now open up the call for Q&A.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
To allow everyone the opportunity to ask a question or comment please limit yourself to one question and one follow up you may reenter the queue for any additional questions or comments again press the star key followed by the digit one.
Well pause for just a moment.
Thank you all for your first caller in the queue, we'll hear from Helane Becker from Cowen. Please go ahead.
Thanks, very much operator, hi team and just.
Have a question.
On the.
The assets that were lost in and Russia, just can you say whether.
Where we stand with respect to that.
The lawsuits.
The insurance recoveries.
Sure Helane, so look as we've southern prior calls we're continuing to pursue claims against our own insurers as well as the Russian Airlines insurers and reinsurers and as part of those efforts. We continue to have discussions with the Russian insurers regarding potential insurance settlement regarding some of our aircraft that were lost in Russia.
But given the sensitive nature of those discussions and the uncertainty regarding any potential recovery, we're not going to comment further on any of that.
Okay. That's fair. Thank you very much and then just on the demand outlook.
I hear what youre, saying about the demand picture and I don't disagree with anything that you said this morning.
I guess my question is.
To my investors do not believe what you're saying.
I see.
Under the same things you are saying about demand.
Structure issues and so on.
Stuck I get is that.
Maybe I'll not that smart and that somehow the demand is going to fall fall dramatically and cause another.
Decline in asset values for aircraft.
How would you respond to those questions.
Well I think.
Helane, we see firstly as I said.
No sign of demand debating and some of the commentary that has come out of one or two of the U S carriers in the last week or two about a decline in yield that's off exceptionally high levels. They do not impact the demand for aircraft aircraft demand is decided by an airline over a decade long period what happens in.
One quarter or two quarter to yields is absolutely irrelevant to that decision making timeframe.
And what we can see is that every 15 years the number of people traveling doubles, that's always been the case, we can see the first thing people did post COVID-19 spend on travel and now even if we do see a mild recession in the U S or Europe. What we have is the growth coming out of Asia too So I don't see us.
And we've been.
Telling the market, we have long before anyone else all because of the visibility we have into the market dynamics that the supply issues would last year's and we were saying that a couple of years ago, and we continue to see that trend and what's you know blatantly obvious is the results of the business just look at the values that were selling aircraft for.
This is a global market.
It's not affected by what one airline says in any one market.
So we just don't see that at the moment and if you look at the values are selling airplanes for they are the lease rates et cetera, and it's very important to highlight the track record of Aercap over 20 odd years.
Has bee and we've gone through so many different issues and over that time frame and the company has always made money.
That's that's very helpful. Thank you very much.
Thank you.
Okay.
We'll hear next from Catherine O'brien from Goldman Sachs.
Good morning, everyone. Thanks, so much for your time and congrats on the quarter.
A question on your sales this quarter, which were very strong once again.
We only have six clean data points of post larger sales, which now include a significant portion of engines like this quarter.
With the combination of demand from the production line and continuing on wing issue driving their demand.
It feels like from the outside that.
Engine demand may even be a little bit tighter than.
And aircraft demand, which is obviously also very tight can you help us think about in rough numbers that the breakout in proceeds this quarter tied to aircraft and engines and then how to compare the sales margin between aircraft and engines.
Because it feels like this.
This is obviously <unk>.
Significant part of the business now will be great just to think about those.
Those dynamics, a little bit more and then sorry for a very long winded question.
And any quick comment on the recent GTS headlines I know you pulled engines with the GSI Fran thanks, so much.
Alright, Thanks, Katy so I'll take that first part.
In terms of the sales this quarter it was around between 35 and 40% engines in total.
And on the margin side I'd say I mean, we are seeing strong margins pretty much across the board for everything that we're selling as.
As I mentioned it was we've got a fair number of older engines and older aircraft in there and we're seeing strong demand for them all given the given the environment. We're currently in so that's really what drove it on the sales side, maybe I'll turn to Gus for the GTS.
Yes, as it relates to the G. T F. This will be another issue.
That will impact the supply of aircraft and spare engines into the Marcus for I suspect years to come we fully believe that Pratt will solve this issue.
And that their fix will start getting rolled out before the end of this year, but what that quantum of engines coming out of the system.
That is a loss of lift.
That won't be in the system next year, and possibly stretching into 2025.
If I was to hazard a guess at how long it really take to fix this issue.
So again that all points to a market, where we will have increased demand for older aircraft Airlines know this and we've been saying this to you guys for some time as well.
We've been highlighting that the airlines have been our biggest buyer of used aircraft for quite some time and as I said in my prepared comments. Thus happened again in Q2 were 40% of our sales were to airlines and these are older aircraft that we're selling to them 18 19 years old airplanes.
Makes sense good time to be in the engine leasing business I guess.
And just a last quick one for Pete.
Does your new 2023, EPS outlook assume that with better than expected cash collection power by the hour and Ses performance that you've observed in the first half.
In fact, our results carry through in the second half or is there potentially upside of those strong trends continue. Thanks, so much for the time.
Yeah, I mean, it basically assumes the environment that we're currently seeing so I would expect all of those trends on all of those funds to continue as they are.
It doesn't really build in like a lot of increase from there, but basically continuation of those trends.
Great. Thanks, so much for the time.
Sure.
We'll hear next from Jamie Baker from Jpmorgan.
Oh, Hey, good afternoon guys.
Thanks for the GTS color that was one of the issues that mark and I wanted to explore but just.
To follow up on that can you confirm that the entirety of releases have.
Hi, water clauses, meaning that the onus of all of this in time off wing.
Falls on the airlines in Pratt to reconcile.
Correct, Jamie adult per ton generally that's downstream there'll be a flight hour agreement generally between the airline and the engine Oems and Thats, where they add the support our penalty that whatever you want to call. It will be assessed perfect and second so.
Corp.
But I understand everything you were saying about global demand corporate is more appears to be largely stalled at the moment, it's really leisure that's exploding last week southwest announced that theyre going to try to re optimize their network in response to this new normal United is leaning very heavily into international.
Wide bodies.
You talk.
Our network planners across your customer base.
What does this all mean.
What are the implications for global fleets and by extension Aercap as a result of this.
New normal.
Well I think it's important to you do you do hear the southwest Commerce, the Alaska commentary last week, but that's a very U S centric.
Focus of cost correct, Barry predominantly domestic operators in the United States and what we're looking at is a global picture and what's happening in all regions of the world. So the U S. Certainly accelerate the first big region to really move out of Colbert at pace than Europe came now we're seeing southeast Asia.
China and what we're seeing against all of this in the background Jamie is continued supply constraints.
So if you looked at say at Air, France, and IAG last week, two massive international carriers both of them were very bullish on the international markets.
Some of it's driven by corporate but as you rightly point out a lot of it is leisure travelers who have the money to spend on business class fares. So.
Aercap as the largest marginal supplier of aircraft engines and for that matter helicopters to the world.
It does bode well for the future.
Sure.
Okay. Thank you very much I appreciate it everybody.
Yes.
Stephen Trent from Citi. Your line is open.
Good afternoon, everybody and thanks very much for taking my questions. Just two quick ones for me.
First you guys.
I think have been very effective on the M&A side over the years.
Onboarding aircraft from GE cash IFC et cetera.
Do you think over the next several years you may have other M&A opportunities or.
Perhaps you are too big.
<unk> been a race too many eyebrows from antitrust authorities.
Look I mean, it's.
It's impossible to comment on mass you know, we always want to be very active in the market. When others are not and I think if you looked at that slide where you show, where we showed how we buy assets we tend to buy when others arent you tend not to see us at the tent in Farnborough when there's a lineup situs.
With many of my peers are lined up with tickets to get in.
So no I think as we go forward wherever we see value.
When will be the most aggressive and clearly today, we firmly believe the cheapest aircraft in the world are the Aercap shares.
And as he pointed out we are selling assets to professional aircraft traders at significant gains and then buying back the shares in our own business from what the public equity market values are aircraft that at a significant discount and as long as that trade continues we'll keep hitting us.
Oh, very very clear and Super helpful.
And just one very quick follow up to Catherines question I think I heard you say.
That the commercial airlines have been acquiring around 40% of your used aircrafts.
Can you give me a sense as to.
What that number approximately was pre pandemic.
Sure.
Yeah, I mean, historically it would have been less than 20% and it's got up as high as 50%.
And in fact in the last quarter Q1 results, we show the history of that actually and we can send that onto you after the call.
So it's a persistent very help airlines buying deal.
No problem.
Awesome. Thank you.
Well move next to Hillary tack to Nandan <unk> from Deutsche Bank.
Hi, Thank you for taking my question.
You've done a great job.
So just wanted to see how youre thinking about your leverage position the buyback just given.
No I think you may see it looks like it could even lever up even more.
Any thinking around the $2 seven or is that still kind of what you're thinking.
In terms of that bank.
Yes, yes.
Yes, thanks, Hilary so as I said, so we're at 251 times now so thats below our target and we are doing this new authorization I mean, when you think about it. So you know in March we did the first authorization, we bought by 9 million shares from GE for $500 million in May we ended the second program, we've used about $350 million of that.
So far right. So we've got around $150 million left in that authorization and as we talked about and as Gus just talked about we still see significant value in our stock. So we're not waiting around for GE to come to market to use that and.
When you think of all three programs together, that's $1 $5 billion, that's more than 10% of our market cap to me in the year. So it's a lot, but you know we're.
We're going to continue to deploy a lot of capital for buybacks and I think the fact that were below our targets just shows that there is more capacity to come.
Okay got it. Thank you and then just.
In terms of the competition of your engine portfolio just wanted to find out is it mostly.
Again, just like the leap in the TTS leaves it kind of evenly distributed between the new tack than prior generation engine.
And then in terms of like what you are selling like what.
Most in demand engines or is it the GPS with the leap <unk> is the kind of evenly allocated.
Well, if I start with the portfolio is heavily weighted towards CFM and leap engine.
Almost exclusively.
Jan access GE 90, leap, one a leap one base pretty much.
Exclusively and in that category.
So that's a positive and our Neo order book is 70% is almost 70%, which is probably the highest in the industry of any lessor waste a to C. F M.
And 75% of our engines are new technology engines.
Okay and is that where you're seeing what we would say yes.
You are seeing demand across the board doesn't matter.
Because with the level of aircraft utilization.
<unk> and <unk>.
Lack of supply.
The demand for new and used engines is extremely strong.
Great. Thank you so much and we look like looking at a conference as I'll come back.
Thank you guys you bet.
Well move next to Chris <unk> from Susquehanna International Group. Please go ahead.
On to Jamie's question, we're going to try to ask this in a different way so.
Yes.
You talked about demand being strong across the board I understand that and about the global supply shortage here.
In the U S.
There's this there's this view out there that we could be moving towards oversupply condition just by looking at seats, but also order books from some of these more U S focused carriers.
Alaska southwestern frontier I don't want to debate that part, but I would love to hear your view.
Where do you think we are in terms of supply demand balance and how do you see that progressing through mid decade.
For markets like the Trans Atlantic intra Europe , Trans Pacific and intra Asia Pacific. Thank you.
Yes.
As we look out now in the interim he say start with the most lucrative market of all the north Atlantic.
The wide body demand was the one that really got hit hard hit the hardest and the supply got hit the hardest in coal, but lots of aircrafts were scrapped.
And big aircraft like a three as you're getting scrapped is like three 760 sevens to loss.
Then we had a lot of airplanes putting to phrase.
We had zero production out of Boeing on the seven eighths.
Airbus dramatically cut production too.
And they cant ramped that up that fast so on the trans Atlantic market I'd expect that to stay very strong no doubt you could have a downturn in the U S or Europe , but even when we've seen those in the past like I mean deep stuff like post 911 financial crisis. It always comes back pretty strong we don't see anything like that out there.
DVD interesting market will be and.
That would give a further catalyst to the to the overall industry.
More geopolitical issue what will happen with the trans Pacific markets that market had been growing significantly there with very high fares and demand.
Out of China to the United States at the moment, that's obviously on its knees that market, but even with that there is still a sharp shortage of the wide body aircraft intra Europe is very strong too we saw the European market come back start to come back over two two and a half years ago.
On the narrow body side, so we see that as very strong in the European markets of so much competition. There are so many airlines in the European market.
Which obviously hurts the.
The profitability of airlines, but that doesn't matter to me I don't care. If an airline makes 10 billion are nothing they still pay the bills I don't get any more for us. So so long as there's plenty of airlines out there, which there will be.
I feel pretty confident about it now four years into the future.
It's just it's just such a difficult thing to do to manufacture aircraft to repair aircraft.
One of the hardest things humans do you put it.
300 people in the air at 46000 feet.
And Youre doing at 12 hours a day on the same machine for years and years.
That's a very hard engineering challenge, so I'm not surprised that the challenges are facing right now they'll get through with the manufacturers, but it's certainly going to persist for for some years to come.
Okay.
Should I should ask you about the U S. U S guys. The U S guys have been the biggest buyers of aircraft older aircraft from us because they don't believe the delivery schedule with Boeing and Airbus for the most part I'd say, so I think those concerns about overcapacity. That's based on scheduled delivery dates if I was a betting man I wouldn't I wouldn't bet too much on that.
Aircraft, arriving on schedule.
Okay. So as we think about these four.
Areas here it sounds like.
For Aercap and.
By extension and however, we want to wait the read through here for the <unk>.
Areas that trans Pacific here as the biggest opportunities we think about the next few years or until mid decade is that fair.
I think the trans Pacific at the one that could really be another further catalyst. If it comes back as we said we're talking you said into the mid decade, and hopefully, we'll see some improvement there and geopolitical and the geopolitical issues by then and that will be one where you get another catalyst.
Great. Okay. Thank you.
Youre welcome.
At this time there are no additional color. Thank you I'd like to turn the conference back over to Angus Kelly for any additional or closing comments.
So thank you all for joining us.
For the call much appreciated and we look forward to talking to you in three months time or else seeing you before that thank you.
That does conclude today's teleconference. We thank you all for your participation you may now disconnect.
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Yes.
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