Q3 2024 Afya Ltd Earnings Call
Speaker Change: Thank you for joining us for AFES Conference Call. I'm here today with AFES CEO Virgilio Gibbon and our CFO, Luiz Admiral Blanco.
During today's presentation, our executives will make forward-looking statements.
Foreign looking statements can be related to future events
Speaker Change: future financial or operating performance, known and unknown risks, uncertainties, and other factors that may cause assets' actual results to differ maturely from those contemplated by these forward-looking statements.
Speaker Change: Forward-looking statements in this presentation include, but are not limited to, statements related to the business and financial performance, expectations and guidance for future periods, or expectations regarding the company's strategic product initiatives and its related benefits.
Speaker Change: These risks include those more fully described in our filings with the Securities and Exchange Commission.
Speaker Change: The forward-looking statements in this presentation are based on the information available to us as of the date hereof.
Speaker Change: You should not rely on them as predictions of future events, as we disclaim any obligation to update any forward-looking statements, except as required by law.
Speaker Change: In addition, management may reference non-IFRS financial measures on this call. These measures are not intended to be considered in isolation or a substitute of the results prepared in accordance with IFRS.
Speaker Change: This presentation has reconciled these non-IFRS financial measures to the most directly comparable IFRS financial measures.
Speaker Change: Now, let me now turn the call over to Virgilio Gibbon as the CEO, starting the next slide.
Virgilio Gibbon: Thank you, Renata, and thanks to everyone for joining us today for our third quarter and nine-month conference call for 2024 results.
Virgilio Gibbon: Let's start with our quarter highlights. Natural Revenue grew over 16% year-over-year, reaching R$841 million.
Virgilio Gibbon: followed by an adjusted BIDA growth of 25% year-over-year, reaching R$348 million with a margin of 41.4%.
Virgilio Gibbon: Adjusted net income followed the same positive trend of last quarter and reached R$165 million.
Virgilio Gibbon: A growth of 29% year-over-year, with an adjusted EPS of R$1.79, 30% higher than last year. Reflecting Arthur's great capital allocation discipline on M&A and efficient capital structure.
We also reported a record cash flow from operating activities.
and the nine-month period with R$1,168,000,000.
Virgilio Gibbon: 25% higher than last year, with a cash conversion of 109.7%.
Virgilio Gibbon: And we are able to maintain our net debt level stable, even considering the acquisition of Unidom for R$660 million, R$7 million in earn-out payments, as will be mentioned further on by Luis Blanco.
Virgilio Gibbon: In this quarter, we have reached 3,593 approved medical seats with the acquisition of Unidol.
Virgilio Gibbon: The approval of 80 seats in UNIMA and the reconsideration of additional 10 medical seats in UNIGRAM-Rio. Our number of undergrad medical students has reached more than 24,000 students, representing over 12% growth compared to the same period last year.
Virgilio Gibbon: Furthermore, our medical school net average sick excluding the unidom acquisition increased almost 5% in the nine-month period.
Virgilio Gibbon: In the continuing education segment, we continue to see great results.
Virgilio Gibbon: presenting a net revenue growth of 10.4% year-over-year, which is R$188 million.
Virgilio Gibbon: Once again, ASEA also reported great results on the medical practice solution, which ended the quarter with an increase in net revenue of 15% year-over-year, reaching more than R$170 million in the nine-month period.
Virgilio Gibbon: These results highlight the significant potential in medical practice solutions driven by a strong ramp-up in B2B and B2P engagements.
Virgilio Gibbon: With more physicians and data in the ecosystem, asset sector activeness to B2B clients continues to grow, engaging 47 unique clients and securing 109 contracts in 2024.
Virgilio Gibbon: Moving now to slide number four, we will talk about our solid business education within our three business units.
Virgilio Gibbon: Starting with the undergrad segment, we saw important movements throughout the quarter such as higher tickets and medicine courses, with 4.8% increase in medicine tuition for the nine-month period.
Virgilio Gibbon: Thanks to the maturation of our medical seats, the completion of UNIMA and ASIA-JABUATÃO integration process in November 2023, and the ramp-up of the four MISE medical campuses that started its operation in third quarter 2022.
Virgilio Gibbon: we are glad to see a gross margin expansion of 170 bits in comparison to nine months 2023.
Virgilio Gibbon: This quarter, we also successfully completed the acquisition of Unidomo, which brings 300 additional medical seats and strengthens our footprint in Salvador, one of Brazil's largest metropolitan areas.
Virgilio Gibbon: Our dedicated efforts and the strong brand recognition in Salvador led to a substantial increase in the medical students' enrollment at Unidom, boosting our student base.
Virgilio Gibbon: Boosting our student base by 37% and reinforcing the impact of our ecosystem and alignment with our growth objectives.
Virgilio Gibbon: Continued education was marked by an operational restructuring which resulted in a growth in B2B students posted by our residency journey offerings.
Virgilio Gibbon: Additionally, we are pleased to see an expansion of five new units in 2024, four of them being cross units in undergrad and one stand-alone campus.
Virgilio Gibbon: Lastly, in our medical practice solution segment, we ended the quarter with over 11% increase in active payers, driven by 11% growth in clinical decision and a 14% growth in clinical management.
Virgilio Gibbon: This result reinforces the opportunity I had in medical practice solutions and is explained by the ramp-up in B2B engagements that boosted net revenues and grew 28% with new contracts with the pharma industry and the continuous ramp-up in B2B contracts.
Speaker Change: And now, I'll be turning the call over to Luiz Blanco, ASIA's CFO, to provide more insight into the financial and operational metrics. Thank you.
Luiz Blanco: Thank you Virgilio and good evening everyone. Starting with slide number six for discussions of key operational metrics by business unit.
starting with the undergrad problems.
Luiz Blanco: Our number of medical students grew 12% year over year, reaching more than 24,000 students. And approved medical seats increased almost 14% yearly.
Luiz Blanco: Our medical school net average tickets, excluding the Unidom acquisitions, increased by 4.8% for the nine months, reaching 8,887 Reais.
Luiz Blanco: We have also achieved R$2,156 million in net revenues, up from R$1,883 million from the prior year, an increase of over 14%.
Luiz Blanco: Regarding the revenue mix, 86% was derived from medical school students and 94% from health related courses.
Luiz Blanco: On the next page, I will present our continuing educational metrics.
We approach the continuous educational metrics through three main journeys.
Luiz Blanco: Starting with the residency journey, we saw a 52% increase, reaching 15,678 students by the end of the period.
In the graduate journey, students' numbers grew by 3%.
Luiz Blanco: reaching 7,300 students, primarily driven by student graduations. Lastly, our other courses and B2B offerings increased by 22% over the same nine-month period of the prior year.
Overall, this effort pushed
Luiz Blanco: the continual educational net revenues to R$188 million in the nine-month period of 2024.
Luiz Blanco: up from a 170m rise in the 9 months of 2023, reflecting a growth of over 10%.
Luiz Blanco: These include a 14% increase in B2B revenue and a 22% decrease in B2B.
Luiz Blanco: Moving to slide number 8, I will discuss the medical practice solutions operational metrics.
The first graph shows our total active pairs.
Luiz Blanco: representing revenue generated in the business to physicians segment. Following a steady growth trend, the number of paying users rose to over 200,000 an 11% increase over the same quarter last year.
The second graph highlights our monthly active users.
Luiz Blanco: which accounts for $249,000, slightly lower than the $259,000 record last year.
Luiz Blanco: This change is primarily due to the transitions from the PEDMAP portal to the AFIA portal.
Luiz Blanco: Lastly, the third graph shows the net revenues from our medical practice solutions, which grew 15% year-over-year, reaching R$117 million.
Luiz Blanco: Of this total, R$100 million was generated by the B2B, showing an increase of 13%, while B2B contributed R$17 million, growing 28% in the 9-month period.
Luiz Blanco: In the next slide, we also present AFIA ecosystem. We are pleased to highlight AFIA's substantial contributions to the healthcare community in Brazil.
Luiz Blanco: By the end of the third quarter of 2024, our ecosystem encompassed 326,000 physicians and medical students using our service and products.
Luiz Blanco: Moving forward to page number 11, I want to discuss our financial overview for the third quarter of 2024. Starting with the next slide. With great satisfaction, I present another strong quarterly performance for AFIA.
Luiz Blanco: Net revenue for the third quarter of 2024 reached R$841 million, representing a 16% increase compared to the same period last year.
Luiz Blanco: Net revenue totaling R$2,455 million for the nine-month period, up 14% year-over-year.
Luiz Blanco: This growth was primarily supported by medical tickets increasing above inflation, the maturations of medical seats, unidome acquisitions, and the performance of the continuing education and medical practice solution segments.
Luiz Blanco: In third quarter 2024, adjusted EBITDA rose by 25%, reaching R$348 million.
with an adjusted debt margin of 41.4%.
Luiz Blanco: a gain of 290 base points compared to the third quarter 2023.
Luiz Blanco: For the nine-month period, adjusted EBITDA amounted R$1,019 million, an increase of 24% over the prior year, with an adjusted EBITDA margin of 44.4%.
representing 350 base points increase
Luiz Blanco: The expansions in the adjusted EBITDA margin is largely attributed to gross margin expansions in the undergrad segment.
Luiz Blanco: The completion of the UNIMA and Arco de Abatão integration process in November 2023. The ramp-up of four Mais Médicos campuses that started operation in the third quarter of 2022.
Luiz Blanco: operation-restricted efforts in continual educational and medical practice solution segments, and more efficiency in selling general and administrative expenses.
Moving to the next slide.
Luiz Blanco: The year's cash flow from operating activities rose by 25%, reaching R$1,167 million, reflecting strong operational performance.
Luiz Blanco: The Operational Cash Flow Conversion Ratio was 109.7% in the 9 months of 2024.
Luiz Blanco: Adjusted net income for the third quarter of 2024 came at R$165 million.
Luiz Blanco: marking an increase of 29% from the same period of 2023.
Luiz Blanco: for the nine-month period ending September 2024, adjusted net income totally 627 million reais, up 47% year-over-year.
Luiz Blanco: This performance was mainly due to the enhancement in our operational results, lower effective tax rates than the last year, and lower interest rates.
Luiz Blanco: In terms of adjusted EPS, the quarter we achieved R$1.79, a 30% growth compared to the previous year, with R$6.81 per share in the nine-month period, representing a 49% increase.
Luiz Blanco: And now, moving to my two last slides, I will discuss our cash and net-debt positions, also give you more color on our cost of debt.
Thank you for watching!
Luiz Blanco: This slide presents a table detailing our gross debt compositions and the total cost of debt covering our primary obligations.
the SoftBank transactions
Did they answer it?
Luiz Blanco: the other financial liabilities, the IFC financing, and account payables to selling shareholders.
Speaker Change: AFIA has entered a financial agreement with IFC to support our expansion initiatives through acquisitions.
Speaker Change: These agreements represent the first IFC sustainability-linked loan based on social objectives.
within the educational sector.
Speaker Change: Under the loan terms, IFC has disbursed R$500 million to be repaid in seven equal semiannual installments beginning in April 2027.
Speaker Change: The interest rate is set in the Brazilian CDI rate plus 1.2%.
Speaker Change: with a potential 15 base points reductions if specific sustainability KPIs are met.
Speaker Change: On the next page, we can look closely at the net death variation.
Speaker Change: As of the third quarter of 2024, our net debt stood at 1,894 million reais.
almost the same level compared to the end of 2023.
even accounting for
Speaker Change: The $157 million earn out payment regarding the additional seats in Guanabi and Unima.
Speaker Change: and the R$660 million regarding the acquisitions of Unidom, we were able to reduce our net debt to adjusted EBITDA, thanks to the strong cash flow from operating activities in the nine-month period.
This concludes our prepared remarks.
Speaker Change: We are very proud of our accomplished and robust performance across all areas.
Speaker Change: Our commit to advance to the medical journey to an integrated educational system and medical practice solutions remains strong, supporting healthcare professionals growth.
Continuous learning.
Accuracy and Productivity
Speaker Change: As we look ahead, we are enthusiastic about the opportunities that lie before us.
Speaker Change: I will now open the conference for the Q&A section. Thank you.
Speaker Change: Hi, if you want to ask a question just please raise your hand. The first call comes from Marcello Santos from JP Morgan.
Marcello Santos: Hi, good evening, Virgilio, Luis, Renata. Thanks for the opportunity for asking questions. I have two. One is regarding, if you could make some comments about the M&A environment.
Marcello Santos: Given that there are a large number of these seats issued, how are you seeing
What kind of negotiations, generally speaking, are you having?
Marcello Santos: How do you think M&A will unfold from now on? And the second question is more about the competitive environment. I know you were able to increase the tuition for new students, I think, by 5.1%, at least projected for next year, which is...
Marcello Santos: Very good number. But what kind of changes, if any, have you noticed versus the previous intake cycles that could be attributed to more competition and how are you dealing with that? Thank you.
Speaker Change: Hi, Marcelo. Thank you for your question. I will take the first one and Virgilio is going to take the second one, okay? Regarding the M&A environments with...
Virgilio Gibbon: The outcome from all these injunctions that come after the Supreme Court's process, all these approvals, they amplify, they increase the number of targets that we have.
Virgilio Gibbon: in our pipeline because these new authorizations come to the market and some of them are starting to talk to us.
sellers, markets, I would say
Virgilio Gibbon: makes us to get a possible, the next year will be a lower multiple.
Virgilio Gibbon: the entities that have our profile and remember that we just go after institutions that are highly concentrated in medicine.
Virgilio Gibbon: And we think that the next deal will have lower multiple per seats if you compare to the latest transactions.
Thank you.
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Speaker Change: Hi Marcelo, I'll get the competitive environment question here. We are keeping the same strategy as we did for the last four or five years.
Speaker Change: We keep passing at least inflation to our average tuition price for the next cycle. As you may notice, we already started our 2025 first semester intake.
Speaker Change: it's still in the very beginning. What we are seeing is the number of candidates compared to the same period last year.
Speaker Change: It's much higher, much better than we saw, much more candidates and leads coming.
Speaker Change: and we are close to 10 percentage points above last year.
Speaker Change: in number of enrollments at the same month. So we are already 50% already enrolled, still have a room. We were at the same time last year, around 40% of all seats already enrolled. So keeping a good health trend to us. And that is not only for medicine.
Speaker Change: We are also seeing a very good trend on other health programs.
Speaker Change: As you may see, we are growing organically very fast on our health program, because we have all the synergy on our campuses, on our labs, and also in our brand, because we are covering health programs. So, the intake...
Speaker Change: coming on health programs. It's also around two digits, high two digits, when you compare to the same period last year.
Thank you, Virgilio. Thank you, Luis. Very clear.
OK.
So our next question comes from Andres Hallis from UBS.
Speaker Change: Hi, good evening everyone, Virgilio, Blanco, Renata. Thanks for the presentation and for the questions here.
Speaker Change: I have two on my end. You mentioned that restructuring efforts in continuing education and medical practice solutions help the company to deliver better beta margins year over year.
Speaker Change: I would like to know how far down the road are we in these restructuring efforts if we could see further margin expansion going forward.
Speaker Change: And the second one is maybe a follow-up on the M&A strategy. Which regions or states the company might prioritize in 2025, if you could comment on that. Thank you.
Speaker Change: the restructuring from continuous vocational and the digital segments. It's regarding the operational efficiency that we got with this restructuring. We had our organizational structures divided by by products, by pillars.
Speaker Change: at that time. So I'll give you an example on the
Speaker Change: the digital sites. We have a product manager for the content pillar. We have the product manager for
Speaker Change: the support decisions that we have for the product manager for the practice management tools.
When we did the restrictions, we did not only pass
Speaker Change: the content structure from the digital science to the continuing educational sites. We did more than that.
Speaker Change: Unified all the structures that delivers the product. So we just have one product manager for all the offers that we have on the medical practice solutions.
Speaker Change: In the continuous education, we have the same. We have just one product manager for the in-person and the digital offer. So the gains that we got through 2024 are regarding the better management for this structure. We are reducing costs and expenses for providing the service.
Speaker Change: From 2025 ahead, the margin expansions will come from the operational leverage that we are getting in each one of these bills.
Speaker Change: So, they are growing and we have all the structures in place, so with this structure we are able to increase our results per each one of the segments.
So
Speaker Change: this is for the first question. If I may add just a point here Andre, one thing that you guys need to be careful in order to model our results
is about next.
So, yes, we...
Speaker Change: But when we talk about mix, we need to be careful because the undergrad grows a bit lower than continuing education and digital services, so that can impact the margin overall.
Yes, thank Renata.
Speaker Change: And regarding M&A targets in each regions that are possible within Brazil
Speaker Change: We are not focused on any specific regions. We are more focused on each one of the institutions. The institutions have to be highly concentrated in medicine to become a target to us.
Speaker Change: And, of course, we've been, in the last three acquisitions, we've been
Speaker Change: talking with players that are more based in large cities. And remember that we closed the latest business combination was in the city of Salvador. And the previous one, it was in Jabotão and Maceió. So we don't seek any specific regions. We seek specific targets.
Speaker Change: that are highly concentrated in medicine and trying to get a good IRR on each one of these deals.
Speaker Change: Got it. Thank you. Thank you Blanco and Renata for the comments.
Speaker Change: Of course. Next question comes from Mirella from Bank of America.
Speaker Change: Good evening, everyone. I have two questions on my side. The first one regarding the monthly active users on the digital services solutions. This has declined 4% this quarter, accelerating from the second quarter. So could you give us some more color on the decrease and when do you expect this to normalize now that the PubMed platform has already been transferred?
Speaker Change: And the second question would be on the ramp-up of when you don't margins since the acquisition. Could you guys comment a little bit on what are the main lines supporting the margin gains there and what are the main challenges? What do you expect in terms of normalizing and normalized margins there?
Speaker Change: Hi Mirella, so regarding your first question, we have one fact that affects
Speaker Change: our monthly active users, that is the launch of Porta Wafia.
Speaker Change: I don't know if you guys recall, but we had in the past, the Portal Peb and Madge.
Speaker Change: and we have changed to Portal Afia. And with that, we had a decrease in the number of monthly active users. It's totally normal since we have changed, but we launched it in March, April. And since then, we are seeing really great results from this new portal. It's part of our new brand strategy.
Speaker Change: Yeah, just adding a point here. On the other side here, Mirella, we were asking for more data from each user.
Speaker Change: So that helped us to increase the number of payers. So we have much more users that are paying the monthly fee.
Speaker Change: than the monthly active users, just because we changed the procedure how to get the data when some new user is signing to have access to our portal. Okay.
Thank you. Bye.
Luiz Blanco: Now, as Blanco is speaking, I will take the second one regarding Unidom.
Speaker Change: We are very glad with the business combination itself. It's been performing better than initially expected for us.
Speaker Change: And remember that when you don't deal, we got down with around 850 medical students over there. We put that information under the 6K that we announced the deal. And we finalized the second semester intake,
with more than 1,150 medical students over there.
Speaker Change: institutions around 60% of the occupations over there and only two months and remember that we we had the closing in first of July we have been able to increase occupations to around 80%
in just two months.
So, this is what brings these margins in this semester.
going ahead, what we can expect.
Speaker Change: We can expect more regarding Unidromo because we had a room
Speaker Change: to go to 100% of occupancy over there. And with that, we have all the integration gains.
That we're going to integrate it.
Speaker Change: they are legacy systems, they are systems to our shared service items that will occur during 2025. So these process unifications plus
Speaker Change: the fulfillment of the existing capacity in Unidom will even expand more the margins that we got from this deal.
Thank you for watching!
That's super clear. Thank you.
Next question comes from Luca Marchesini from Italy.
Luca Marchesini: Hey guys, good evening, and thank you for taking my questions through.
Speaker Change: A couple of questions from our side. The first one will be regarding the continuing education segment for which we saw a deceleration in net revenue growth this quarter. Can you please provide more color on the reason behind this deceleration and also how should we expect growth for the segment throughout 2025?
Speaker Change: Can you please comment on what should be the target or a comfortable level for financial leverage going forward and also if we should expect a higher give-and-pay-out ratio in 2025?
Yeah.
Speaker Change: Hi Luca, about the first question on the growth rate on continuing education.
used to be called the Pillar One.
Speaker Change: We are in the middle of the stronger intake, also on graduate programs. We have a high cohort, a very large cohort, graduating this last semester.
Speaker Change: So that was the main reason why we are kind of flat this quarter right now. But we are seeing good trends on intake. You can check that we launched five new campuses. These new campuses are ramping up this semester right now. So we have good figures, but it's still early in the process.
Speaker Change: The seasonality of this new intake starts in October, November, December, goes until January and February. So we may expect some flats on continued education, something in the same path on the fourth quarter, and getting better in 2025.
Luiz Blanco: Hi Luca, it's Blanco speaking here talking about the financial leverage.
Speaker Change: I really like the Net Debt Reconciliation slide that I have presented.
Speaker Change: And it was a really amazing performance when in just nine months we reduced our net debt to just a little bit from 1.6 times that we got at the end of 2023.
Speaker Change: and reduced to 1.3 right now if you consider the net-net compared to the midpoint of the guidance that we got for this year.
Speaker Change: Even, we've done two inorganic movements, important inorganic movements, that was the Unidon acquisitions and the earnouts that we paid for the additional seats from Unima and FIPI Banambi.
Speaker Change: Moving ahead, what's our view on that? Our view is that we leverage the company doing business combinations.
the minimal return on investments, and we're talking about IRR.
that returns our capital.
Speaker Change: So we are very strict on that, on capital allocations, on that. So we leverage the company to do business combinations, and then we started to extract synergies from these business combinations, keep generating cash, keep the discipline of having a high...
Speaker Change: cash conversion ratios to decrease the leverage until we are prepared to do the next business combination.
Speaker Change: As we are becoming bigger with this strategy, all the marginal acquisitions that we made have less impact in our financial figures.
So, with that...
Speaker Change: seeds per year target. If we have a possibility to start to distribute dividends, but this is ongoing discussions, we did not have any kind of changes on our policy.
Speaker Change: So that's my view regarding the net debt to the leverage ratio.
Luca Marchesini: Just a reminder, Luca, that next year we have also MICE Medicals, so we have the acquisitions that we are going to keep our pace up to $100 per year and also to start the investments of the MICE Medical units that we will need.
Speaker Change: So just a reminder, if you want to ask a question just raise your hand.
Next question comes from Lucas Nagano.
Speaker Change: Hi, good evening, Virgilio, Luis, Renata. Thanks for taking our questions.
We have two
Speaker Change: The first is regarding the tuition increase in candidates per seat. We'd like to get a sense of the variance of those metrics between your institutions, basically to understand whether we can see your portfolios segment.
segmented into different buckets.
Speaker Change: If there is a particular type of school that saw higher tuition increase in candidates versus another that saw lower, or not, you're still seeing very homogenous trends.
Speaker Change: So this is the first question. The second question is a follow-up on capital allocation.
and M&A
Speaker Change: But take into account the softbank debt, we still have plenty of time until the debt can be redeemed.
Speaker Change: but how's your base case about this assuming, if we assume that that is redeemed, how does it change your capital allocation priorities? Would you be more inclined to refinance it or and keep up the M&A or to pay down to that? Thanks and sorry for the long question.
Speaker Change: Hi Lucas, I'll get the first one here about the tuition and the candidates ratio.
Speaker Change: So we have more than 30 campuses offering medical programs from North, South, East, West of Brazil and we are pricing differently.
Speaker Change: So, the average for 2025 is around 5.1%, the average that we are passing through all institutions.
Speaker Change: Of course that we have some of the institutions that we have a very good cohort, quality students applying for that. We are moving forward, moving ahead of 5.1. And the other institutions, independently on the tuition level.
Speaker Change: We are priced a little bit lower. Of course, that we have synergy as we operate integrated. We can move candidates from one campus to another campus. But our commitment here is to keep passing at least inflation in terms of average for all campuses that we have.
Speaker Change: The candidates ratio, as I mentioned in the first question here, we are seeing a much higher demand.
Speaker Change: at the same, when you compare the same point that we are on the intake process. So we are still in the very beginning that goes until January, most of them.
and also in terms of enrollment.
Speaker Change: So today we have almost 50% of all seats already fulfilled for all campuses in AFIA in Brazil. That also includes
Speaker Change: Unidon that's our last acquisition here so the candidates ratio is still in the very beginning but what we can say here that we are better actually much better than the same period last year when you compare the intakes okay
Luiz Blanco: And again, Blanco speaking here, talking about the SoftBank deal, as you mentioned before, from May 2026.
Luiz Blanco: SoftBank has the optionality to do the early redemption of the deal, of the convertible.
Luiz Blanco: We didn't get any kind of anticipations of these discussions, it's an optionality that SoftBank has.
Luiz Blanco: It's not clear for us if they are going to do the early redemptions on that.
We could easily get another source of finance.
Luiz Blanco: these discussions, but we could easily manage it to get to substitute this finance for another instrument.
Super helpful, Virgilio, Luis, thanks.