Q1 2025 Sociedad Quimica y Minera de Chile SA Earnings Call
[music].
Yeah.
Speaker Change: Hello, everyone and welcome to the S SKU and first quarter 2025 earnings conference call.
Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to participate you wouldn't need to press star one one on your telephone you will then hear a message advising your hand is traced to withdraw your question simply press Star one again.
Isabelle: Please note. This event is being recorded now it's my pleasure to turn the call over to the Investor Relations Officer. Isabelle then take the floor is yours.
Isabelle: Okay.
Isabelle: Thank you operator, good morning, and thank you for joining S. Grand earnings Conference call for the first quarter 2025.
Isabelle: The conference call will be recorded and is being webcast live.
Isabelle: Our earnings press release and presentation with a summary of the results have been uploaded at our website, where you can also find a link to the webcast.
Ricardo Ramos: So they speakers include our CEO Ricardo Ramos.
Speaker Change: F O get ugly Janice God loves to be CEO of lithium chiller division of lumpy meter CEO of iodine plant nutrition Division and the rest Montana commercial Vice President of International Lithium Division.
Neal: You bet Neal commercial vice President of lithium Chi Le TV Babylon, Nonetheless, Vice president of strategy and development of lithium Chiller Division and one Pablo will only our commercial vice president of INR and industrial chemicals.
Speaker Change: Before we begin I would like to remind you that statements made in this conference call regarding our business outlook future economic performance anticipated profitability revenues expenses and other financial items, along with expected synergies and brother or service line growth I can see.
Speaker Change: Forward looking statements under the federal Securities laws.
Speaker Change: These statements are not these perrigo socks and may be subject to changes due to new information future developments or other factors, we assume no obligation to update these statements except as required by law.
Speaker Change: For a complete forward looking statement, please refer to our earnings press release and presentation.
Speaker Change: I am now, leaving you with our Chief Executive Officer, Mr that we got to the lungs.
Speaker Change: Okay.
Speaker Change: Thank you good morning, everyone and thank you for joining US today, we're pleased to report that asking beyond 2025 with solid operational and commercial performance in the first quarter, we achieved the highest first quarter lithium sales volumes in our company's history do you mean by that 20% yeah.
Speaker Change: Year on year increase this growth reflects sustained strong demand, particularly from electric vehicles market in China, and Europe, as well as growing adoption of energy storage systems worldwide.
Speaker Change: Lithium prices on the other hand, we are relatively stable during the first quarter 2025, but over the past few weeks, we have seen a decline in prices that we don't think is sustainable in the industry.
Speaker Change: What's already showing negative results.
Speaker Change: In any case as a result of this our average realized prices for the second quarter 2025 should be lower than the levels seen in the first quarter.
Speaker Change: Australia, the production of our spud Humana concentrated more in Holland is progressing well and the commissioning of the queue. We're not refinery is also moving forward with the expectation to see first product in the coming months in Chile, We continue working on our capacity expansions to reach capacity to 240 <unk>.
Speaker Change: The metric tons of lithium carbonate and the hundred thousand metric tons of lithium hydroxide moving.
Speaker Change: Moving.
Speaker Change: Two our <unk> business, we are pleased with another strong quarter prices had reached a record average.
Speaker Change: Thai supply and steady demand, primarily driven by the X-ray contrast media application our seawater pipeline construction is advancing rapidly and will be key to expanding production capacity in the meantime, we're investing in operational efficiencies to respond to customer needs and optic.
Speaker Change: <unk> output.
Speaker Change: In the specialty plant nutrition sales volumes grew at a healthy pace. We also saw an upward trend in prices early in this year, mainly due to strong demand for potassium chloride on some supply disruptions market dynamics remained favorable across Latina America, the U S and Europe.
Speaker Change: We know where potassium business a sudden anticipated volumes were significantly lower compared to the same period last year. This reflects our strategy to reduce but that's in production to give priority to high lithium content brines and focus in the production of more value added products within our SPN business lines to summarize S.
Speaker Change: Again delivered strong commercial results in the first quarter. Despite a complex pricing environment. Our long term fundamentals remain intact, we're confident in our strategy our investment in capacity and innovation and our commitment to sustainable high quality growth. Thank you all.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Operator, we can now move to Q&A. Thank you. So much unnecessary reminder, that is star one wanted to get in the queue and wait for your name to be announced Superstore. Your question simply press Star One again, one moment for our first question. Please.
Ben <unk>: And it comes from the line of Ben <unk> with Scotiabank. Please proceed.
Ben <unk>: Thank you very much and good afternoon, everyone three questions.
Ben <unk>: First one just a very straightforward simple question, you've talked about the asps in Q2, being a little bit lower than in Q1.
Ben <unk>: Do you expect that on that on an operating cash flow basis, you will be breakeven or positive.
Speaker Change: Per metric ton in lithium in Q2.
Speaker Change: Okay.
Speaker Change: Hi, Dan how are you can see that we.
Speaker Change: We are far from from breakeven cost, we were not expecting to be close to breakeven.
Speaker Change: And significantly above that in the second quarter. This year I mean, the upcoming quarters. We believe we are one of the lowest cost producers.
Speaker Change: So we are far from that position.
Speaker Change: Perfect Perfect and then another question for you.
Speaker Change:
Speaker Change: The tin prices are obviously lower than a lot of people expected this year.
Speaker Change: Your growth plans haven't changed and so what the plug is now going to mean is less operating cash flow to fund the capex growth.
Speaker Change: A greater reliance on accessing capital markets can you talk about how your mind may or may not be changing in terms of our capital structure of funding.
Speaker Change: <unk> projects and other lithium is coming in a little lower than expected.
Jeff: Well Jeff.
Speaker Change: Before answering your question and you know you know of course, we have all the business lines.
Speaker Change: Other products are doing quite well so the capacity to generate cash that the company has is quite strong.
Speaker Change: On top of that we have a strong balance sheet, we have a track record of having a very strong balance sheet and we plan to continue having a strong balance sheet. So we're constantly.
Speaker Change: Suddenly assessing all the projects that we that we have on our portfolio.
Speaker Change: Of course understanding what is happening in the market.
Speaker Change: But so far.
Speaker Change: The financial or the balance sheet that has not been a constraint and we don't expect it will be a constraint in the future either.
Ricardo: Okay, and then just very last one Ricardo maybe for you.
Speaker Change: We're hearing a lot of noise.
Ricardo: And politics out of Chile, right, now and kind of a fight.
Ricardo: About the outcome and the future of the Codelco JV.
Ricardo: I didn't understand I don't understand why this is even a debate or even being brought up I thought this was a signed agreement.
Ricardo: And Youre, just kind of dotting, the i's and crossing the Ts and then it'll be effective Jan one.
Speaker Change: Can you talk about why or why is this even a debate right now in Chile, and what are the different paths forward. Thank you.
Ricardo: Yeah.
Ricardo: Okay.
Ricardo: As you say at the beginning is a lot of noise and I think thats. The perfect word to describe what's will benign a lot of noise. When you start digging into the numbers stay it's a great deal so great deal for the country's a great deal for the region for the communities for Codelco for this game. It means there's something very good.
Ricardo: Sometimes when you are in an election year, you'll have a lot of noise from everything is not the only noise in Chile. If you have a Chilean newspaper, we have a lot of different noises everywhere. He means an election year you all without.
Ricardo: Different discussions, but what is the real fact, the FICA said, we are advancing according our original plan with codelco working very hard.
Ricardo: We are now and the end of the process not as good for us in the end of the process of the consultation with the towns near other operations, that's being carried out by cultural and finally, we are we submit all the documents required by the regulatory authorities are free competition in China. Therefore, we think that the timeframe for the transaction.
Ricardo: <unk> to be finally executed will be viewed in the second half of this year no changes about that and again you will have.
Ricardo: It is a big transaction chilies, a small country.
Ricardo: These kind of transactions are important and I got to where you have many things going on but but but but again its just noise I don't foresee any real raison fundamentals to have any debate about the construction.
Ricardo: That makes sense. Thank you very much.
Speaker Change: Thank you one moment for our next question that comes from the line of Joel Jackson with BMO capital markets. Please proceed.
Joel Jackson: Alright, Thanks, I'll ask my questions one by one as well.
Joel Jackson: Team I notice in this slide deck in this release that you maintain your view that lithium demand will grow 17% globally as a market. This year, but you no longer show your commentary from a few months ago do you think that SQL sale themselves for lithium will grow about 15% year over year do you maintain.
Joel Jackson: That you will grow 15% sales this year and if not what's your number.
Felipe: Yes, Hello, Joel this is felipe.
Felipe: Look considering the current market conditions.
Felipe: With uncertainty derived from geopolitical and trade tensions.
Felipe: We have not really updated our annual volume forecast for 2025.
Felipe: However, regarding Q2 I can comment.
Felipe: But we expect a similar or slightly lower volume versus the first quarter.
Felipe: Yeah.
Felipe: Yeah.
Felipe: Okay.
Felipe: Second question would be.
Felipe: There's been some commentary out in the markets.
Felipe: As for prices in China have decreased a lot you sell product China, obviously, you got some contracts I believe explorers.
Felipe: There's some discussion about customers fighting back and saying spot price or below floors, we want to pay lower prices can you comment on that dynamic and how you are dealing with that.
Felipe: Okay.
Joe: Yeah Joe.
Joe:
Joe: I would like to start saying that we have more than 200 customers worldwide. Each of these customer have a different type of pricing.
Felipe: I'm talking about significantly in China, I know I know.
Felipe: He just China I know if you can talk about China I'd really appreciate I know you have lots of customers.
Joe: All of these different products, but maybe just in China, because I believe you're very helpful.
Joe: Yes, what I want to say, what I want to highlight is that with each customer and this happens in China also with its customer we have different price mechanism in conditions that are all confidential and I cannot commence I would ask you to please understand that I will not go into any specific about that.
Joe: Okay and just finally.
Joe: And as a follow up on Dan's question, a little bit, but I think that essakane philosophical demeanor has been hey, we're going to double our production over the next seven years because he global demand is growing three times. So we're just we're just growing double our own capacity. So there you go we're not really adding some market, but you know when I look at your comp.
Speaker Change: Terry when you talk about the.
Joe: The market's oversupplied.
Speaker Change: The market is probably caught you by surprise how weak it is.
Joe: As stewards of capital here do not have to think about you know what is the right amount of capacity to add when it seems like there's a lot going on in this market that maybe is not easily visible or understood.
Carlos: Hi, This is Carlos <unk> CEO of lithium division in Chile.
Carlos: We're still we were working on this one there are capacity, we're the leader of our production on deep learning the Warren Mino stay will have the lowest cost.
Carlos: The industry, we continue with our program to expand the capacity to lead to producing more deeply so phase two later to converting China has been a successful business for us. So we are really confident about the demand.
Carlos: And we feel good.
Carlos: And that we will do keeping me expanding network capacity. So we don't we don't see an issue there.
Speaker Change: Sorry, just one more for me I get Youre confidant demands.
Speaker Change: But it seems like Youre not no one in the industry has commented on supply.
Speaker Change: Right and some of your own commentary on this quarter.
Speaker Change: So don't you get worried that your view on supply could be wrong.
Speaker Change: Yes.
Speaker Change: Set of numbers for <unk>, when our latest chart and we are confident in the long term as they can out of Alberta.
Speaker Change: So price is going to disappear.
Speaker Change: We position tusa blowing this time, what I say before we I believe that we're the lowest cost producer in the industry.
Speaker Change: Thank you very much.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Lucas Ferreira with JP Morgan. Please proceed.
Speaker Change: Alright, one moment for our next question Luca if you can queue up again.
Speaker Change: Our next question is from Corrine Bland chart with Deutsche Bank. Please proceed.
Speaker Change: Hey, good morning Kim.
Speaker Change: The first question would be on the long term trend.
Speaker Change: So in our original presentation from white found out that the decrease there.
Speaker Change: Volume guidance by nine or 10%. So I wanted to see what's your view here is and how do you think volume will be for 25 and going into 'twenty six.
Andre Fernandez: Yes. Thanks, Cory this is Andre Fernandez from Mosquito International lithium.
Speaker Change: You need to be careful with the web with farmers reported because they they follow our fiscal year.
Speaker Change: Our guidance anyway, our guidance for this calendar year for SQL share is between 150000 to 180000 tons.
Which is around 10000 tonnes lower than our <unk>.
Speaker Change: Range provided in November last year.
Speaker Change: This revision is primarily due to the impact of Bush fires and a limited equipment availability.
Speaker Change: As you know during January we were impacted by our regional bus fire in the surroundings of the mine.
Speaker Change: And was a significant event in the region tens of thousand hectares.
Speaker Change: But this kind of risk.
Speaker Change: We are the ones that you are prepared so starting from the design of the plant to the implementation of procedures to having established and trained on increased management scenario.
Speaker Change: Thanks to all of that we can say that nobody was hurt.
Speaker Change: We are extremely proud of the performance of the team and appreciative of Cabelas team, especially.
Speaker Change: About their reaction and also that was recognized by the authorities in Western Australia. So that is what we can comment about production for 2025.
Speaker Change: Thank you.
Speaker Change: And then a second question can you please remind us.
Speaker Change: The dividend policy I think we're getting some question about whether you're going to restart during quarter any dividend.
Speaker Change: So just if you can comment on policy dividend policy and the cadence of it. Thank you.
Speaker Change: Hi, Cory this is get out of the dividend policy that was approved by the board and presented to a shareholder established that the company will distribute 30% of its net income.
Speaker Change: The of 2025.
Speaker Change: The dividend policy also establish or according to the law in Chile.
Speaker Change: The dividend has to be paid.
Speaker Change: Or has to be approved by shareholders.
Speaker Change: In the ordinary shareholders' meeting that is scheduled to happen in April next year.
Speaker Change: The companies can pay interim dividends.
Speaker Change: During the year.
Speaker Change: Sometimes in the past, we eschew M. We have paid interim dividends.
Speaker Change: But.
Speaker Change: At this moment, we're not considering.
Speaker Change: These statements are at least for the first quarter and that will be assessed.
Speaker Change: In the future, but the dividend policy established 30% dividend payment.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And it comes from Emerson, the Ara with Goldman Sachs. Please proceed.
Speaker Change: Alright, one moment for our next question.
Speaker Change: Comes from Alejandro Demichelis with Jefferies. Please proceed.
Alejandro DeMichelis: Yes. Good morning, Thank you very much for taking my questions would be too.
Speaker Change: Two small questions if I may please.
Speaker Change: The first one is.
Speaker Change: When you're talking about your growth plans are so can you. Please confirm what how you see your capex requirements for say this year next year. That's the first question.
Speaker Change: And then the second question is have you got a follow up to the previous question on pricing is.
Speaker Change: How should we think about your realized prices.
Speaker Change: Lithium prices continue to come down should we expect them to follow that path or should you expect them to be more moderated and then what we see on the screen. It's just call it.
Speaker Change: Hi, Alejandro if you get out of.
Alejandro: Yeah, well, we usually review our our Capex plan once a year.
Speaker Change: Once that he said review this a share with the market.
Speaker Change: We should review our our Capex plan in the upcoming months and of course, we will share with the market the conclusion for that.
Speaker Change: Today, we don't have any updates from what was the share a few months ago and.
Speaker Change: We're working on the expansion of our lithium production.
Speaker Change: The facilities in Chile.
Speaker Change: Carbonate and hydroxide also expanding our ability to produce lithium sulfate.
Speaker Change: On top of that we're working on the on demand hallen commissioning of the refinery.
Speaker Change: And on top of that the initiatives that we're working on in the nitrates and <unk>.
Speaker Change: <unk> were the most important one is they see what a pipeline that should let us expand in the future our capacity to produce more iron So no no our data.
Speaker Change: As of this moment.
Speaker Change: Okay clear thank you.
Speaker Change: Yeah.
Speaker Change: Hello, Alessandro regarding prices.
Speaker Change: Well as you probably know after remaining relatively stable during Q4, 'twenty four and Q1 2025.
Speaker Change: Air with some daily fluctuations up and down lithium prices in China started to go down.
Speaker Change: About one five months ago.
Speaker Change: And prices in Asia outside China have also been going down.
Speaker Change: So our sales volume is largely concentrated in China, and our realized prices remain mainly linked to price indices. Consequently, we do expect a lower average sales price in Q2 compared to Q1.
Speaker Change: Okay.
Speaker Change: The answer is that your pricing will be linked to those indices yeah.
Speaker Change: Yes, yes indeed.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question is from Julio <unk> with Bank of America. Please proceed.
Julio: Hi, Thank you for the call.
Speaker Change: My question is about Europe.
Speaker Change: Your thoughts here.
Speaker Change: <unk> announced an investment in early two project in Chile.
Speaker Change: As we know.
Speaker Change: It has an oversupply in parts of their pressure. So if you could share your thoughts on how your what impact do you expect for <unk>.
Speaker Change: Right.
Speaker Change: Also Fred Cohen <unk> competitive position.
Speaker Change: Lee.
Speaker Change: Okay.
Andre Fernandez: Hello, Julio this is partnered on this so during 2025, we expect the demand to reach around $1 4 million metric tons, representing over 15% year over year growth.
Andre Fernandez: China remains with a significant lead in the EV market with more than 40% year over year growth and roughly 70% of the <unk> global sales.
Andre Fernandez: Other hand, the European Union has had a very strong first quarter with the U S. Having a slight decrease by we continue to evaluate potential impact on their corresponding new regulatory environment.
Andre Fernandez: Overall markets, we continue to shift slightly there was some carbonate production with LSP continuing their dominance in China starting to expand abroad.
Andre Fernandez: During 2025 supply is expected to grow close to 15% as well reaching between one five to $1 6 million metric tons, assuming no significant production delays were in the market as a consequence of the current low price environment.
Andre Fernandez: Yeah.
Andre Fernandez: Okay. Thank you.
Speaker Change: One moment for our next question.
Speaker Change: And it comes from the line of <unk> with <unk>. Please proceed.
Speaker Change: Volume is very low Mr. Dominic if you can get higher.
Speaker Change: Barely we can barely hear you.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Hum.
Speaker Change: Let me.
Speaker Change: Let me know if it works if not I can sense alright.
Speaker Change: Alright, thats, a little bit better.
Speaker Change: Okay, Okay perfect. So.
Speaker Change: We have two questions. The first one regarding <unk>.
Speaker Change: The lithium competition youre facing in China from other producers because it seems that several up several of them should be struggling at these prices.
Speaker Change: Production it seems that it is continuing.
Speaker Change: That's my first question.
Speaker Change: And my second.
Speaker Change: You mentioned in the fourth quarter that you were.
Speaker Change: We're seeing some optimism over a positive trend in 2026.
Speaker Change: Has this view changed with information so far in 2025.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hey, Jeff This is Paul.
Speaker Change: So regarding competition in China of course, we face significant competitors in China. They have a large portion of the market.
Speaker Change: Many of the competitors that we see in the lithium industry overall.
Speaker Change: Some of them have had not so very good results of course, they do to the lithium price environment. So I think this is that overall the industry is struggling with this current pricing.
Speaker Change: And regarding your question on prices for 2026.
Speaker Change: Of course prices will be a consequence of the supply demand balance. So we will see how this year develops.
Speaker Change: And then see what the impacts will be for next year.
Speaker Change: Okay.
Speaker Change: Okay perfect. Thank you.
Speaker Change: Thank you and as a reminder that is star one one if you do have a question. Our next question is from Lucas Ferreira with JP Morgan. Please proceed.
Lucas Ferreira: Hi, everyone I Hope you hear me now sorry, My line dropped the previous time.
Speaker Change: My question was answered.
Speaker Change: Perfect I don't know if my question was answered why it was out but it's for my first question to confirm your Capex numbers for this year in the next few years if you can.
Speaker Change: And which are the main projects in the pipeline now consuming this copaxone and the second question on regarding production cost of lithium.
Speaker Change: First let's talk about our Tacoma, if the ramp up to 240 gives you sort of a fixed cost dilution effects. If there is anything in the carbon plants are in the pipeline to help on reducing cost eventually so pretty much if you confer any.
Speaker Change: So about what number to expect for cash cost.
Speaker Change: In theory that would be great and any initial views on the cost of our production amount all in how it's been evolving and if you have anything to share with us that would be that'd be great. Thank you very much.
Wes: Hi, Lucas your Capex question, Wes with Us Theyre already if you want we can we can discuss about that later.
Wes: Carlos.
Speaker Change: Hi, Luke.
Speaker Change: Regarding today, our coffee and Tina I have to mention there well you already know that we have faced the very lowest price had during this year.
Speaker Change: Mainly because of that we have been working several cost reduction initiatives in order to maintain our cost leadership in the marketing we have been working at the same time, increasing the capacity working on quality.
Speaker Change: And all of that we have been improving the euro so we expect to reduce our operational cost during this year and the coming year.
Speaker Change: Okay, So should we expecting declining nominal cost.
Speaker Change: For for anything in this year and the coming years is that fair to assume.
Speaker Change: Where will struggle declining nominal cost, yes, so what they have in the first quarter.
Speaker Change: Okay. Thank you very much very helpful.
Lucas Ferreira: Yes Lucas.
Speaker Change: <unk> regarding your question on Monhollen, let.
Speaker Change: Let me start by saying that even at current prices our munhall operation is cash positive.
Speaker Change: And we are executing as planned so we continue to be in ramp up mode in the concentrate there.
Speaker Change: So as you know every operation and ramp up is has faced is facing higher costs, but we are confident that over long term our project will generate satisfactory returns.
Speaker Change: Because we do have a attract.
Speaker Change: Attractive cost structure.
Speaker Change: And on top of that we would have an integrated lithium hydroxide production.
Speaker Change: As you know we are commissioning the refinery right now and we are very happy with the results of the commissioning which is currently at 95%.
Speaker Change: Okay, Lucas Ricardo Ramos speaking here.
Speaker Change: Just want to do.
Speaker Change: Put a summary here that we have a positive view about the long term in the lithium industry. It means today price environment is not sustainable. It means there is no way in the industry can survive. These prices is probably the only one I am not sure D is the only but one of the only that can have great tunable profits at today pricing you mean.
Speaker Change: Surprise should improve in the future and are probably in the near future.
Speaker Change: But we can say is that there is no one in the world Best prepared we are at the best one in order to take advantage of the market. We have been very successful increasing capacity today, we have the capacity the quality the alternatives the market Australia means everything you've seen in our favor to take advantage of the recovery of the prices.
Speaker Change: That is coming it means we cannot know we don't know when but market is very strong means demand is stronger than ever. The uses of the electric vehicles industries is better than expected in terms of quality of the car's performance whatever.
Speaker Change: That's why we think that even though there are some issues in the world in the trading activities between different countries in the medium term.
Speaker Change: This demand will continue to increase we will continue to increase and we are prepared to supply the lithium to the market means that we have a positive it would be my view.
Speaker Change: I don't have the Crystal ball anyway, but my view is positive for next year. The thing that prices will go back to a reasonable price environment and I think the demand will continue to growth we are going to be the number one prepared on that and again Carlos Dias said before we had all the time he means Howard causes by far the lowest cost.
Speaker Change: But it's even better today than what we used to be two years ago I mean, the working our facilities being great in terms that we have been able to have and you see my numbers in our numbers in the first quarter than our numbers speak by themselves in terms that we generate significant profits in the lithium industry, even though oil prices were.
Speaker Change: Hello.
Speaker Change: That's something that we are very proud to he will continue in the near future and in Australia.
Speaker Change: Was commented now we've seen that we have one of the best production of Spodumene and probably we will start producing now I took side that were being integrated very good deals and broadly were made at a very strong competitor in the industry again.
Speaker Change: I have a positive outlook in the medium maybe long term, but of course, we're facing a situation very complicated second quarter in terms of the pricing everyone is facing distribution not only again, everyone is selling in China Chinese to be is the most important market in the world. There is no one big producer of lithium without selling their products in China and the yen facing.
Speaker Change: What is the market price and we think that we are the best one to do it.
Speaker Change: Okay.
Speaker Change: Thank you very much guys predicts licenses.
Speaker Change: Thank you so much. Our next question is from Constancia Gonzales with Quest capital. Please proceed.
Speaker Change: Consensus if you can check your mute button.
Constancia Gonzales: Hi, Thank you for taking my question.
Speaker Change: I had a quick.
Speaker Change: Regarding the volume.
Speaker Change: We have for me.
Speaker Change: I appreciate it.
Speaker Change: My information.
Speaker Change: Lachlan theory right now Brian.
Speaker Change: In the case.
Speaker Change: One <unk>.
Speaker Change: Or could you give us more detail around the level that you are.
Speaker Change: In the quarter.
Speaker Change: Okay.
Speaker Change: And this year as I said before we are feeling ramp up mode.
Speaker Change: In that period of course, youre facing higher costs.
Speaker Change: But as mentioned we as soon as we reach steady state the project discussion.
Speaker Change: Cash flow positive even at these prices. So we are confident I'm very satisfied with the evolution of that project.
Speaker Change: Okay. That's fair to clarify are you considering to add depreciation.
Speaker Change: And then last question.
Speaker Change: Yeah.
Speaker Change: Let's talk <unk> in comparison with first quarter 'twenty.
Speaker Change: <unk>.
Speaker Change: Right.
Speaker Change: So that's why I was asking.
Speaker Change: Okay.
Speaker Change: Hydrocarbon services hit out of the.
Speaker Change: But if I was referring to cash cost in his statement.
Speaker Change: Hello, Ryan this will conclude our <unk>.
Speaker Change: <unk> and answer session for today, and our program as well. Thank you all for participating and you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.