Q3 2024 Ternium SA Earnings Call
Thank you for standing by. My name is Kayla and I will be your conference operator today. At this time, I would like to welcome everyone to the Tourney M. 3rd quarter, 2024 results call. All lines have been placed on mute to prevent any background noise.
After this week of your marks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, follow by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press the star and 1.
Speaker Change: I would now like to turn the call over to Sebastin Marti you may begin.
Sebastin Marti: Good morning and thank you for joining us.
Sebastin Marti: My name is Sebastin Marti, turn into global AI and compliance in your director.
Speaker Change: Yes, it's a very good experience, we have a third quarter of the first time in months of 2024.
Sebastin Marti: Please call it intended to compliment that presentation.
Sebastin Marti: I am joined today by Maximo Vedoya, the Ernest Chief Executive Officer and Pablo Brizzio, the Ernest Chief Financial Officer. We will discuss Ernest Business Environment and Performance.
Sebastin Marti: We welcome the floor to questions, follow me out at the time of the month.
Sebastin Marti: Before we begin, I would like to remind you that this conference call contains four looking information and that actually, we self-smal vary from those expressed to implied. Factors that could affect results are contained in our findings with the security and exchange commission and on page 2 in today's World Cup presentation.
You will also find any reference to known IFRES financial measures, reconciled to the most directly comparable IFRES measures in the Dutch release issued yesterday.
Speaker Change: with that I turn the call over to Mr. DeLoges.
Mr. DeLoges: Good morning and thank you very much for participating in today's tournament third quarter early in post.
Mr. DeLoges: Third New Report It, an adjusted every day of 368 million and a net income of 93 million dollars for the third order
Speaker Change: We experienced increased shipment across all our primary markets and as anticipated in the last quarter's call our margins decline. Primary due to the increase in real life price in our main market.
Speaker Change: The steel market in Mexico remains healthy, operating at consistent levels after last year's significant 14% year-over-year increase in apparent steel consumption.
Speaker Change: For the fourth quarter, we expect a decline in shipments as a result of this period being the seasonally weak of the year.
Speaker Change: Additionally, public investment has been soft recently, which is common in Mexico following a change of administration.
Speaker Change: Once this process is completed, we expect demand from infrastructure projects to return as the new government has announced plans to launch several projects aimed at enhancing the competitiveness of Mexican industry.
Speaker Change: Looking ahead, our outlook has several bright spots.
Speaker Change: In the first quarter of next year, we expect sequential shipment growth in this market. In part, this will be the result of our new PICLIN 9, which is boosting our capacity for automotive and industrial markets as it ramps up production.
Speaker Change: Furthermore, I am optimistic about the Mexican market in the year to come.
Speaker Change: of 2024, and is expected to reach 4.2 million units in 2025, which could be a record high.
Speaker Change: benefiting the steel market on both sides of the border.
Speaker Change: The new administration in Mexico recognized this opportunity for the country and stated its commitment to pursuing a policy of industrialization and import substitution very much in line with what we have been advocating for many years.
Speaker Change: Thank you.
Speaker Change: Moving to Brazil, we see healthy industrial activity and a dynamic distribution market. Steel consumption in Brazil market has been growing during the year, increasing 9% year-over-year in the first nine months of this year.
Speaker Change: Vehicle production is growing as well, with an expected 5% increase in 2024.
Speaker Change: On the other hand, flat steel imports jumped 20% year-over-year in these first nine months, mainly from China, as this country significantly increases steel shipments to the international markets.
Speaker Change: As it has already happened in other countries, the Brazilian government noticed this increase in unfair trade from China and as a result of their still excess capacity.
Speaker Change: put in place.
Speaker Change: A one-year quote system under which...
Speaker Change: Still, imports above a certain quota are subject to a 25% tariff. Unfortunately, these measures haven't yielded the expected results.
Speaker Change: Finally, let's review Argentina. Steel volumes in Argentina market has shown a recovery over the past several quarters, both within the industrial and the commercial market.
Speaker Change: In the fourth quarter, we expect to maintain a stable level of ski achievement, despite the seasonally slowdown in activity towards the end of the year.
Speaker Change: With a long-term view, I think Argentina's industrial and construction activity will improve in 2025, favoring a recovery in local steel demand.
Speaker Change: The Argentine government is implementing an ambition reform program that we expect will promote investment in the country.
Speaker Change: However, there is a risk in this market of an increase in imports of unfair trade.
Speaker Change: Our wind farm in Argentina will begin operation by year-end, boosting our use of cell-generated renewable energy and reducing reliance on external sources.
Speaker Change: The project is progressing as planned, with the completion of 22 bases and the installation of 14 wind turbines to date. We anticipate that the first tuner will begin delivering energy in December.
Speaker Change: with a project expected to reach full completion by January. This represents a significant milestone in our commitment to renewable energy and decarbonisation.
Speaker Change: Let me now give you an update on the progress of our expansion project.
Speaker Change: products capacity. During the next two months, we plan to start up the two remaining lines in the finishing center.
Speaker Change: In addition, we are making steady progress on the 600,000 tons per year galvanizing line and the 1.6 million tons per year cold rolling mill.
Speaker Change: We have completed the soil movement.
Speaker Change: and the civil work and assembly of structure and buildings are advancing rapidly. Equipment shipments have already commenced.
Speaker Change: Lastly, for the construction of the 2.6 million ton per year slab making facility in Pesquería, we have completed the cleaning and soil movement in most areas. We are making progress in the civil work, foundation and structural installations.
Speaker Change: Also, key operational contracts have been awarded and are underway. We expect to start up this lab facility by mid-2026.
Speaker Change: The new production lines in Pesquería project will enable the company to enhance its product offerings with a broader range of high-quality steel products and cater to the diverse customer needs more effectively.
Speaker Change: meeting the high-quality requirements of the automotive and appliance sectors.
Speaker Change: This facility will also enhance terminal operation efficiency and reduce dependency on external suppliers, leading to cost savings and improved profit margins.
Speaker Change: Finally, I would like to highlight the publications of Ternium's latest sustainability report.
Speaker Change: For the first time, our target includes scope 3 emissions, which are not directly associated with our company.
Speaker Change: This includes company 1 emissions related to the production of semi-finished products such as slabs and billets produced from third parties and category 10 emissions generated by our customers during the processing of our slabs and billets.
Speaker Change: In addition, we are expanding the boundaries of our CO2 emissions reporting beyond crude steel to include hot-rolled steel production.
Speaker Change: And we migrate to GHG protocols methodology to improve...
Speaker Change: comparability with other induces and prepare for future regulatory requirements.
Speaker Change: The update target is a 15% reduction in emissions intensity by 2030, using 2023 as a baseline.
Speaker Change: As in previous years, our Greenhouse Inventory for 2023 was audited by a third party, following, as I said, both GHC protocols and World Steel methodology.
Speaker Change: With these changes to our reporting, we are among the very few companies that include SCO3 emissions in their targets. Our aim with this decision is to significantly increase transparency and accuracy in our emission report.
Speaker Change: We invite you to download the report from our website and review the extensive information on our sustainability initiatives.
Speaker Change: The detailed insights will offer a comprehensive understanding of our commitment to sustainable practices.
Speaker Change: Thank you.
Speaker Change: To wrap up, my initial remarks.
Speaker Change: in 2025. I believe our main markets will offer several opportunities for our company with the strength of the industrial market in Mexico, the recovery of steel consumption in Brazil, and the significant reforms to Argentina's economy.
Speaker Change: In addition, I expect our margins to gradually improve during the year, with lower costs of raw material and slabs, and I will continue work in cost-cutting initiatives.
Speaker Change: Let's move to the webcast presentation for a detailed overview of our operations and financial results.
Speaker Change: If we start by page 3, we see that, as anticipated, our adjusted OEDA declined this quarter.
Speaker Change: The main factors driving this result were lower realized steel prices across our main markets, which were partially offset by a small decline in steel costs per ton and an increase in shipments.
Speaker Change: Turning to the next slide, net income for the third quarter was $93 million.
Speaker Change: When comparing second quarter adjusted net income to the third quarter net income, we see lower deferred tax losses and improved financial results in the third quarter.
Speaker Change: Partial upset by a decline in operating income.
Speaker Change: The effects gained in the quarter reflect the favourable effect of the Mexican peso depreciation and the Brazilian real appreciation against the US dollar, causing effects gained on Tanius Mexico net short local currency positions.
Speaker Change: and Luchimina's U.S. dollar-nominated debt.
Speaker Change: Let's turn to our Steel Segment performance on page 5.
Speaker Change: This quarter, a significant increase in our key markets.
Speaker Change: We anticipate a decrease in shipments in the fourth quarter due to usual ERN seasonality both in Mexico and in Brazil.
Speaker Change: Now let's take a look at the Consolidated Sales and Profitability of the Steel Segment on the next page.
Speaker Change: Despite an increase in steel shipment, sales held steady compared to the previous quarter due to the decline in revenue per ton, driven by a decrease in realized steel prices in our primary market, which affected our margins.
Speaker Change: The price decline was partially offset by a small decrease in steel cost per tonne as we continued to use previously bought raw material and slab during the third quarter.
Speaker Change: I love you.
Speaker Change: Yoseminio's Best Furnace, operations recorded efficiency gains in the period, particularly in fuel consumption. In addition, labor and maintenance costs decreased sequentially in the third quarter.
Speaker Change: Let's move on to slide 7 to review the performance of our mining segment. In the third quarter, shipments rose by 13% sequentially.
Speaker Change: Driven by higher production in our Mexican and Brazilian operations.
Speaker Change: Despite this quarter over quarter growth, net sales were relatively stable due to the offset of lower iron ore market prices.
Speaker Change: Thank you.
Speaker Change: Our margins in the mining segment decreased in this quarter, mainly due to this drop in iron ore prices, while slight reduction in cost per tonne helped to soften the impact of this decrease.
Speaker Change: Let's move on to the next slide to review our cash flow performance.
Speaker Change: As of the end of September, Ternium's net cash position declined to $1.7 billion, with a decrease in cash flow from operations compared to the second quarter, primarily due to a decrease in the VTA and an increase in working capital, together with a higher capital expenditure.
Speaker Change: Moving to the final slide, we can see a summary of our performance over the past five years.
Speaker Change: In the first nine months of 2024, our capital expenditure saw a significant year-over-year increase. We continue making progress, as Maximo explained, in the construction of new facilities in our Pasquería Industrial Center, as well as in the new wooden farm in Argentina. We expect to have a total capex of between $1.7 to $1.8 billion in 2024.
Speaker Change: To conclude this presentation, I would like to highlight that yesterday, Terms Board of Directors announced the payment of an Interim Dividend of $0.90 per ADS, totaling $177 million.
Speaker Change: Over the past three years, the company has structured dividends so that the interim payment in November represents roughly a third of the total annual amount.
Speaker Change: With the remaining two-thirds distributed in May, following shareholders approval.
Speaker Change: We expect this time to follow the similar approach.
Speaker Change: So, our total dividend payment corresponded to the fiscal year.
Speaker Change: 2024 would represent a dividend yield of above 8% based on the current share price and a 68 payout ratio based on adjusted net income for the past 12 months.
Speaker Change: Subs by www.zeoranger.co.uk
Speaker Change: Over the past three years, Adicional de Borja consistently decided to distribute a substantial dividend annually.
Speaker Change: The current dividend decision aligns with the established practice of providing an attractive dividend yield and allocating a significant portion of net income, even during periods of increased capital expenditure.
Speaker Change: This capability is a result of Ternium's solid financial position.
Speaker Change: With this, we have concluded our initial prepared remarks. We would like now to go on to take any questions you may have. Operator, please begin the Q&A session. Thanks.
Speaker Change: At this time, I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad Our first question comes from the line of Marcio Frid with Goldman Sachs. Your line is open
Marcio Frid: A couple of questions on my side.
Marcio Frid: Yes, can you hear me? Sorry, Marcio? Yeah, now yes, I think.
Marcio Frid: All right.
Marcio Frid: Let me know if...
Marcio Frid: It's not good. Yeah, morning. Thanks for the opportunity. A couple of things on my side. I think we started the call by showing still good conviction on Mexico's demand going into next year and somewhat profitability improvement as well on lower costs.
Speaker Change: Argentina seems to be performing well and you also showed some good conviction as well. I understand obviously HFC prices, benchmark prices have been lower and that's, you know, the main reason for weaker earnings in the third quarter, right, but then the surprise was the dividend cut. Our initial understanding is that you would sustain
Speaker Change: is the co-founder and co-director of Balanced Sheet Leverage.
Speaker Change: at low levels to allow you to execute cutbacks and at the same time keep the commitment on a flat to growing dividends right so it was a bit of a surprise to us and when we hear about
Speaker Change: the constructive outlook.
Speaker Change: We're just trying to understand, you know, the reason why.
Speaker Change: Thank you very much.
Speaker Change: The Board decided to cut dividends this year. And if you can assume, you know, eventually we'll resume the $3.3 a share that you paid.
Speaker Change: last year as well.
Speaker Change: And secondly, I mean, it's obviously a big topic today, the outcome of the U.S. election. I think it's laid out some of the important actions that the Mexican administration is taking to support industrial activity in Mexico, to some extent reassuring, but also important substitution as well. So.
Speaker Change: Obviously, we've seen some of the headlines suggesting higher taxation and potential debt theft, for instance.
Speaker Change: on Mexico as it relates to renegotiation of the U.S. CMA agreement. So if you can talk about that as well, your initial thoughts and risks and opportunities for tenure being in Mexico and directly and indirectly exposed to the U.S. and North America, that would be great. Thank you.
Speaker Change: Thank you very much, Marcio. I will start with the second part of your question and then we go to the dividends.
Speaker Change: the outcome of the U.S. election, and you were very clear. I mean, I see this as an opportunity, to be honest.
Speaker Change: First of all, we are out of the...
Speaker Change: the uncertainty. We have two new administrations, one in Mexico that is already a month in the job, and now we will have...
Speaker Change: something good because now people can start talking and can and can start working together.
Speaker Change: I think from the Mexican point of view, the new administration, President Sheinbaum, I think she understands and shares very much the concern.
Speaker Change: The US and the Trump administration, especially Trump, have with China and fair trade. She has been very clear and very vocal about this.
Speaker Change: As you probably know, several weeks ago, we participated in the U.S.-Mexico CEO Dialogue, which is a dialogue that's been going on for quite a few years between CEOs of Mexico and the U.S.
Speaker Change: of all the participants, that the opportunity of strengthening the North American region and to safeguard
Speaker Change: against violation of trade, especially by Asia.
Speaker Change: In that meeting also, people were very positive about the good outcome of the new USMCA. I mean, the new USMCA, which was negotiated in 2018,
Speaker Change: The other thing that the President of Mexico said in that meeting was
Speaker Change: a hundred billion dollars.
Speaker Change: So I'm positive about the outcome of these elections.
Speaker Change: I hope I answered that part of the question, Marcio.
Speaker Change: That was great, thank you, very detailed. And Pablo, what are you going to call about dividends? Yeah, okay, yes, Max, I will do that. So,
Speaker Change: If you want...
Pablo Brizzio: the Board's decision was for a nominal reduction of dividend payment, but if you consider on the broader spectrum, you will see that the dividend that was proposed and that was approved is a dividend that not only
Speaker Change: Thank you.
Speaker Change: but also has reduced a bit the total net cash position but also taken into consideration that we are entering to the part of the cap expense next year which will be higher as you know, than this year. So.
Speaker Change: All in all, what the company is doing is sustaining a very strong dividend payment.
Speaker Change: with a very high level of distribution. And as I say on the opening remarks.
Speaker Change: This is possible because, as you know, as we discussed many times,
Pablo Brizzio: This is Pablo Brizzio.
Speaker Change: in Pesqueria. So, in our view, the world we have done with this approval of the Debian Entertainment is basically streaming the high level of the Entertainment of the Campa Nuzhadi.
Speaker Change: We have increased substantially in payments in the last three or four years and this continues to be the case.
Speaker Change: Of course, if you look just by the nominal number, there has been a small reduction on that one. But if you look at the old comparisons and old ratio, the dividend payment continues to be very high.
Speaker Change: We hope to answer your question, Marcio. Yeah, no, that's great. Is it fair to assume that we then should look at more of the dividend use because obviously share price is down by about 20% here today and that's helping the yields, right? But is it fair to say we should look more at the yields and the payouts rather than the nominal term?
Speaker Change: Exactly, because the payout ratio basically is around 70%, which is...
Speaker Change: high in comparison to any other company than what we have done in the past three or four years. So we are distributing a significant amount of what we have generated during the year.
Speaker Change: Okay, that's great. Thank you very much.
Speaker Change: You're very welcome.
Speaker Change: Thank you.
Speaker Change: And your next question comes from the line of Alfonso Salazar with Scotiabank. Your line is open.
Alfonso Salazar: Yes, thank you for the call and for taking the question. Maximo, I have another question for you, and this is regarding the steel industry in North America, not only Mexico.
Speaker Change: What is the outlook here?
Speaker Change: What we know is that North America is a big net importer of steel.
Speaker Change: There is more capacity needed for all these efforts for re-shoring and near-shoring, but at the same time we have this overcapacity problem globally and it's only getting worse as China weakens, the demand in China is weakening.
Speaker Change: So, how do you see the global steel market going to balance? Are we going to have two separate steel markets globally? One by China and another one by North America and Europe? How is this going to unfold over the next three to five years?
Speaker Change: Alfonso, that's a great question.
Speaker Change: All right. You can call it industrial policy, whatever you want, but it was a government incentives
Speaker Change: that create an overcapacity not only still on many industries.
Speaker Change: So that's a problem in itself, and as I always said, it's impossible to compete.
Speaker Change: with China, with all the subsidies and all the schemes that the Chinese state-owned enterprises has in steel or in many, many other products.
Speaker Change: What will happen, or what is happening, is that most of the regions...
Speaker Change: are reacting to this.
Speaker Change: North America is reacting to this, the US, Canada and Mexico have implemented a series of actions, Brazil is starting to react, Europe has already reacted, so I think we are going to have many regional markets.
Speaker Change: And that's how it's going to operate in the future. In the case of North America in particular, I think the North America region is a very competitive region to produce steel.
Speaker Change: especially low carbon intensity steel. I mean, as you know, Mexico, probably of the big markets, of the big producer, is the lowest of CO2 emission per ton, followed by the US.
Speaker Change: in being able to supply all the needs of the region in a competitive way.
Speaker Change: No-one can compete with a state like China and I think that it's because of that, that reaction, is that the governments are taking place.
Speaker Change: I hope I gave a short answer of a very long topic.
Speaker Change: Just one question on this, the risk of tariffs for steel entering the U.S., there is a risk in your view, what can Ternium DOS do if that happens, what could be the strategy?
Speaker Change: to strengthen all the North American supply chain and I think that
Speaker Change: The administration in Mexico and the new administration or the future administration in the U.S. has a common objective in this. I'm very confident that, of course, there will be discussions and negotiations, but at the end, they are looking the same.
Speaker Change: So, I guess things are going to be resolved.
Speaker Change: Okay, so basically what North America needs is to be, you know, reduce impost from other regions. That would be the goal.
Speaker Change: Well, that's a clear objective of the President of Mexico, and she was very public about this in several things.
Speaker Change: and even put the number of 200 billion dollars in the public. I think it's also the objective of the new or the future administration of the U.S. I think President Trump was very clear about this.
Speaker Change: And the U.S. in general is very clear that the dependence of China
Speaker Change: It's not the way to go, and the strength of a North America supply chain, I think is
Speaker Change: Benefits theory for everyone I mean there's a lot of positive things to discuss integration of the energy sector in the North America that's also a very important subject that can benefit a lot the US and Mexico
Speaker Change: So I think there are very positive things to discuss.
Speaker Change: which I think will be the way.
Speaker Change: So, I'm very...
Speaker Change: I'm very positive about this.
Speaker Change: Last one, I promise. This question is, in the near term, the region will need to continue import and steal from elsewhere, from other countries. There is no way around it, right? So it may not be China... I'm not sure about that.
Speaker Change: www.mustwatch.eu
Speaker Change: I'm not sure about that.
Speaker Change: I mean, I think the region, if you count Canada, US and Mexico, I think we can supply most of the steel that is consumed in the region.
Speaker Change: Yeah, but Net Improvement is $44 million.
Speaker Change: in the last year, so it's a big amount. But there you have the imports of between both countries.
Speaker Change: Right, right. So you have to discount that. Correct.
Speaker Change: So the net imports, you're talking about net imports of steel of less than 15 million or 20 million. And I think.
Speaker Change: If we increase capacity, most of that comes on, and some of the imports come from Europe and Japan, and that's things that you can manage.
Speaker Change: Correct. Okay, yeah, that's just what I wanted to understand. Thank you so much, Maximo.
Maximo Vedoya: Thank you to you, Alfonso.
Speaker Change: Thank you.
Speaker Change: And your next question comes from the line of Henrique Braga with Morgan Stanley. Your line is open.
Henrique Braga: Thanks for taking my question. I have two questions on my side. First one is regarding the steel imports in Brazil. I know you mentioned that you talked much more about how the governments
Speaker Change: Bye.
Speaker Change: I just wanted to know from you, what is the company doing now, if you're working closely with the government, and what's the outcome that you expect from that, if the quota system is going to reduce somehow, if it's going to extend for a longer period of time, if the tariffs are going to increase in some way?
Speaker Change: and the other one is about the future investments. I know you have an ongoing CapEx plan but if you have a
Speaker Change: Some thoughts about what's the next step for Tanium after the investment in Mexico. We will plan to continue in the Americas or an expansion in any other regions.
Speaker Change: is a possibility. Thank you.
Speaker Change: Thank you Enrique, still important in Brazil, I mean
Speaker Change: Thank you. Thank you.
Speaker Change: The government implemented this quota system in June, so it's very early, but I don't know, maybe you know it, but it's a system that you have a quota,
Speaker Change: A four-month quarter.
Speaker Change: So you cannot surplus, supposedly, that quota.
Speaker Change: Let me give you an example, these are real numbers. The quota for the flat product was around 400,000 tons.
Speaker Change: That's the quota for the fourth first month.
Speaker Change: The Input
Speaker Change: hundred thousand. It's a double double and most of those Didn't pay taxes in this type of 25 percent. What we are saying to the government, not merely to the government, but I in particular ask that the association
Speaker Change: is saying to the government is...
Speaker Change: As he dis-implemented, it's a good...
Speaker Change: I mean...
Speaker Change: I don't know, it's a good first step, but it's not working because there are some loopholes in the system.
Speaker Change: We should continue working to close off those loopholes. The second thing that Ternium and other companies are doing is...
Speaker Change: I hope this is clear.
Speaker Change: from the first question, Enrique.
Speaker Change: Okay
Speaker Change: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show.
Speaker Change: The pesquería project, as you know, is the biggest project we have ever had in our history.
Speaker Change: So, we are not focusing the next two years in completing this project on time, and with the quality, as you know, it's going to be really the first.
Speaker Change: Steel shop of their kind. So we are very focused on completing this and be successful in this.
Speaker Change: Hmm?
Speaker Change: And once again, if you would like to ask a question, please press star and one on your telephone keypad. Our next question comes from the line of Camilla Barter with Bradesco BBI. Your line is open.
Camilla Barter: Hi, good morning. Thank you for the opportunity for taking my question.
Camilla Barter: And on cost, for Q4, you mentioned we could expect a drop as lower raw material inventories flow through results, but looking at 2025, what can we expect in terms of cost? And also, if you could provide your expectation for free cash flow in the coming quarter, it would be great as well. Thank you.
Speaker Change: Thank you, Camila, very much for your questions. CapEx in 2025, I think that was your first question.
Camilla Barter: Yes.
Speaker Change: A total capex will be around 2.3 billion dollars. This is including Uximinas. A big part of that is going to the Pesquería project, of course. 2025 will be probably the year of more capex.
Speaker Change: in our history because of the Pesquería project.
Speaker Change: Cool. I am sorry to not be able to hear your questions but I think the second one was in respect to our expectations for free cash flow generation in the coming quarter. Let me take that one, Maximo. Yes, please.
Maximo Vedoya: Okay, yeah, you're right, that was your question.
Speaker Change: Thank you very much.
Speaker Change: taking that into consideration.
Speaker Change: and nothing else, no in case of inventories or in our account receivables, so it shouldn't be that we shouldn't have that case in the coming quarters.
Speaker Change: So, you have a positive operating cash flow and then continue increasing in the capex. So all in all, should be in a better position than the one that we have this quarter.
Speaker Change: Secondly, as we have already mentioned, both Maximo and myself, our expectation is to continue reducing costs, different ways to do that.
Speaker Change: One of them is something that we discuss almost every quarter, which is...
Speaker Change: Now, we are at a-
Speaker Change: And that's why we should see a reduction in costs coming in the next and the following quarter. So, that is one of the reasons why we said that we can have a slightly better EVDH generation in the coming quarter.
Speaker Change: as was mentioned, we are always, and especially in this situation, working very hard in continuing our cost reduction program in all the facilities where we are operating. So we tend to be positive in that respect.
Speaker Change: The numbers that we already mentioned for the fourth quarter and especially for 2025.
Speaker Change: I'm going to call it.
Speaker Change: Very clear, thank you.
Speaker Change: Thank you, Camila.
Speaker Change: And there are no further questions at this time. I would like to turn the call back over to the CEO, Maximo Vedoya.
Maximo Vedoya: Okay, thank you very much all for joining us in this call. We welcome your feedback and have a great day. See you in three months.
Speaker Change: This concludes today's conference call. You may now disconnect.