Q2 2026 Empresas Copec SA Earnings Call
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Speaker #3: So, having said all that, let me begin by showing some of the main figures for the quarter and some of the main developments for the quarter in this highlight slide that we're showing on screen here.
Speaker #3: We came in this quarter to an adjusted EBITDA and an EBITDA both above $1 billion, so very good figures for both measures. In the case of the adjusted EBITDA, it is up by more than 30% year-on-year.
Speaker #3: And close to 18% quarter on quarter. In the case of our traditional EBITDA, it is up by 44%, and almost 20% year-on-year and quarter on quarter, respectively.
Speaker #3: All of this has to do with improved performance in forestry, and particularly in energy. In the case of forestry, this EBITDA includes the effects of a sale of assets.
Speaker #3: It's actually a sale of wood carried forward by Arauco during the quarter—only wood, and not land, as we will see going forward. And the stump patch effect related to that sale is also included in this adjusted EBITDA figure.
Speaker #3: Let me just comment that the stump patch portion is equivalent to the operational margin for the plantation business, so it makes sense to consider it part of EBITDA.
Speaker #3: Together with that, we have higher volumes in pulp for the year-on-year comparison, offset to a certain extent by lower prices and increased costs. In the case of wood products, we have an increase in prices and an increase in volumes in panels.
Speaker #3: In the Q-on-Q analysis, we have higher prices in pulp, partially offset by lower volumes, and also a better performance in general for the wood products division.
Speaker #3: Of course, the main highlight of the quarter is energy. In the case of energy, we have Copec showing a positive inventory valuation effect year-on-year, together with a higher, sustained, and even higher contribution from the lubricant division, and also a very favorable industrial margin.
Speaker #3: Abastible is also showing a very strong performance, essentially across its Latin American geographies. In the case of the quarter-on-quarter comparison, we are showing a high industrial margin for fuels in Copec, together with a decrease in distribution costs.
Speaker #3: We'll provide some more detail on that as we go through the presentation. In terms of developments, another milestone was the Super New Project reaching a progress of 74.5%.
Speaker #3: Ahead of schedule, with civil construction reaching 90% and railway construction reaching 45%. So all is going well at the super new site.
Speaker #3: Some more figures are presented there on screen. As I said before, an adjusted EBITDA and EBITDA of more than $1 billion, composed essentially of an energy EBITDA of more than $600 million.
Speaker #3: This is significantly up year-on-year and also slightly up quarter-on-quarter. Forestry EBITDA is showing a recovery with respect to the preceding quarter, up 58.9% quarter-on-quarter, including, of course, the sale of assets.
Speaker #3: Minajusta continues to perform very well, with EBITDA this quarter of $287 million. Very good EBITDA generation on the back of a good pricing scenario, together with smooth and fluent operations at the mine.
Speaker #3: The CapEx is in line with what we had announced: $920 million, most of it devoted to the forestry division. And in terms of credit metrics, net financial debt to adjusted EBITDA is 3.13 times.
Speaker #3: Including, of course, the effect of the hybrid bonds issued by Arauco last year, which have an equity credit of 50%. In a historical context, as I said before, these are high—very high—figures in terms of historical comparison.
Speaker #3: More than $1 billion for adjusted EBITDA and EBITDA, and also net income at a very healthy level of $440 million for the quarter, which is 92% up year-on-year in that case.
Speaker #3: Our credit metrics and some financials are shown there on screen. You can see our total debt reaching $13 billion, with total cash of almost $3 billion, which yields a net debt of $10.4 billion.
Speaker #3: We have gradually been smoothing out our maturities. You can see their maturities are quite well balanced and gradually smoothed out, following some refinancing operations—some of which we will comment on going forward.
Speaker #3: Debt is well allocated by company and also by currency, with all companies very well hedged in terms of their currency exposure. Additionally, debt is very well diversified by type.
Speaker #3: All financial channels are open for the company, and you can see their net debt to EBITDA standing at 3.13. So, it has been quite stable, hovering around three times for the last few quarters.
Speaker #3: In terms of financial ratios, 9% for return on capital employed and 9.7% for EBITDA margin—pretty much in line with the comparable quarters. Let us dig deeper into the different business divisions.
Speaker #3: Forestry—we're showing some numbers from Arauco there on screen. Arauco ended the quarter with a net income of $121 million and an EBITDA of $415 million, which is considerably up with respect to the preceding quarter.
Speaker #3: As I said before, this EBITDA includes the stump patch portion of the sale of forestry assets, which amounts to $124 million. The stump patch portion amounts to $124 million, and that goes into EBITDA.
Speaker #3: The operating income goes down on the back of higher costs, lower pulp, and some timber prices, partially offset by some increase in volumes in terms of pulp and wood products, and also higher panels prices.
Speaker #3: As we can see, and as we will see further on, we had an interesting recovery of the woods division in general for the quarter. Going further into pulp, you can see that the pulp EBITDA division for the quarter is $206 million, comparing well with the preceding quarter of $194 million.
Speaker #3: In general, we had an increase in net sales driven, on the year-on-year comparison, by sales volume and, on the quarter-on-quarter comparison, by price, essentially.
Speaker #3: Costs have trended somewhat upward during the last few quarters. That's an industry phenomenon in general. Costs are trending upwards to some extent because of disrupted logistics.
Speaker #3: And to some extent, this also has to do with the maintenance that has taken place during the year. You can see the schedule for the year on the bottom left-hand side.
Speaker #3: Some comments from the pulp market. During the second quarter, we saw a challenging environment in China, essentially because of weakened demand for printing and writing, and also for tissue.
Speaker #3: So, a weak demand was faced by the paper makers. Together with that, some inventory levels are rather high in some particular grades and products.
Speaker #3: With all that, the hardwood and softwood prices remained generally stable for the quarter, with the exception of the last few weeks, when we saw some decline.
Speaker #3: In Europe, we saw, in general, a solid demand situation, with high, strong employer demand for printing and writing, and tissue in general, with less competition coming from the Middle East.
Speaker #3: So, in general, we saw more solid demand for our particular production. As a result, we also saw some increases in hardwood prices. In relation to dissolving pulp, we have seen a strong situation over the last few quarters.
Speaker #3: With an upward price trend. So, seasonal consumption had a positive effect, together with higher viscose prices and stable lyocell demand. So, that was the market scenario for the quarter.
Speaker #3: And going forward, what we see for the outlook is still a somewhat challenging demand in China, with tissue and printing and writing continuing to face demand that is not very strong.
Speaker #3: And somewhat elevated inventories as well. So we might see the need for papermakers to reduce operating rates and therefore rebalance supply, and reduce demand to some extent.
Speaker #3: In Europe, in general, it's a stable situation. However, there is some softer demand for certain products, driven in part by seasonality. This makes it difficult to follow through with price increases.
Speaker #3: Along with that, we see a gap between Europe and China. So, that could eventually bring forward some adjustments in prices. As you can see in the graph there, at the bottom left-hand side, by the end of July we are facing levels of around $570 for hardwood, around $690—sorry, for softwood, and $890, which is very strong for dissolving pulp.
Speaker #3: The Wood Products division had a good quarter, as you can see there. There's a recovery in EBITDA, growing from $84 million in the previous quarter to $113 million, which is a figure much more in line with the traditional historical figures that we have reported for this division.
Speaker #3: We usually think of this division as yielding a yearly EBITDA of somewhere around $500 million. So, this EBITDA for the quarter is very much in line with that.
Speaker #3: That was driven essentially by a significant increase in panels volumes, both on a year-on-year and quarter-on-quarter basis. We see a very healthy, significant increase in panels volumes.
Speaker #3: And together with that, volumes are also growing for solid wood. Now, going deeper into our main markets, you can see North America in general, which is almost 50% of our total sales.
Speaker #3: We have seen stable demand overall, in particular for MDF—stable demand, but still high supply levels. So, prices in general are pressured by increasing costs; we believe they could keep rising gradually.
Speaker #3: Volumes, however, are under pressure because of the available supply. Molding, in general, with prices increasing in line with costs. In terms of particle boards, we see solid demand.
Speaker #3: A better supply balance when compared with MDF, so prices have been increasing quite strongly. Volumes could remain stable during Q3, and remanufactured products also show stability.
Speaker #3: The supply side was affected by the larger target on Brazilian producers, and prices increased as a result of this, as well as due to stable demand.
Speaker #3: And volumes could stay flat in that regard. Plywood is showing steady demand, with a well-balanced supply. So we could see stable sales and some gradual price increases.
Speaker #3: Latin America, South and Central America, which is around 40% of our sales, has been faring quite well. Brazil has a positive outlook for MDF on prices and volumes.
Speaker #3: In Chile, some particular products are doing well, while other products are seeing more weakness in demand. We could see an increase in sales in the third quarter, although some oversupply is present.
Speaker #3: Plywood is still weak and we are still waiting for a recovery in the construction sector, which could boost demand for products across the board.
Speaker #3: Argentina, in general, is experiencing a stable situation as well, with MDF demand and prices increasing alongside stable supply. However, we are seeing some softer demand in our particular commercial channels.
Speaker #3: The rest of the world where we sell, which is Asia, Australia, Europe, and the Middle East, is in general showing healthy activity, with an improvement in prices and sales in Asia and the East.
Speaker #3: Let us move to energy, which was probably the main highlight of the quarter once again. We saw an EBITDA improvement in Copec and Terpel.
Speaker #3: You can see there the consolidated figures for Copec, with 452 billion Chilean pesos for total EBITDA for the quarter, which compares very well with the figure for the second quarter 2025.
Speaker #3: This basically stems from a higher operating income, having to do with a favorable industrial margin and an increased inventory revaluation effect. This is basically following the upward trajectory in the price of oil and refined products, as you well know.
Speaker #3: And as we have been highlighting over the last few quarters, there has been a very good and sustained performance in terms of the lubricant sector.
Speaker #3: All in all, a very good quarter for Copec, consolidated with good performance in both Chile and Colombia. The main markets, Chile and Colombia, are doing very well.
Speaker #3: Volumes were to some extent hit by prices going up, so we see a 6.6% decrease. That's the relevant comparison here. The quarter-on-quarter is not very significant because of the seasonality.
Speaker #3: But year-on-year is 6.6% down as a result of higher prices, essentially. Terpel is also showing very good figures here, with a total EBITDA of $509 billion Colombian pesos, which compares well with the second quarter 2025.
Speaker #3: And very much in line with the first quarter 2026. This stems from a very good performance in lubricants, together with the effects related to the upward trajectory in prices.
Speaker #3: And offset a little bit by a decrease in physical sales. The main decrease here is Ecuador, which has been hit to a certain extent by the gradual sales of gas stations that we are pursuing in that country.
Speaker #3: Our steel, also within the Energy division, is doing very well. And this has been a trend for the last few quarters, as you can see there in the EBITDA generation graph.
Speaker #3: EBITDA amounted to 74 billion Chilean pesos, which is a very good figure, stemming from an increase in operating income because of higher volumes basically in all geographies, with some exceptions, as we will see going forward.
Speaker #3: And in general, very good operations across Latin America. If we go to the country-by-country analysis, you can see the volumes in Colombia there increasing by 36.5%.
Speaker #3: Really good performance, and this has to do with a very good performance of the home segment, and in general, high consumption driven by natural gas substitution.
Speaker #3: This is something that has been taking place in Colombia during the last few quarters, so there has been a very important increase in volumes stemming from natural gas substitution in general.
Speaker #3: Ecuador, with higher volumes and margins, is also substituting other sources of energy, and with market share increasing quite interestingly. Peru is doing very well in the bottle segment, with a very strong positioning.
Speaker #3: High volumes and interesting margins, and also a weaker performance of the natural gas segment in general. So, there is an opportunity for substituting natural gas in general in Peru, as we have seen also in Colombia.
Speaker #3: The industrial segment was somehow hit by the weather conditions stemming from the El Niño phenomenon, and particularly by the effect of that on the poultry industry, which is very strong in Peru.
Speaker #3: Market share increased, interestingly, to 29.4% for the quarter. In Chile, we saw lower volumes because of the weather conditions. The bulk segment also had lower volumes, essentially because of lower catches and reduced activity in the fishing division.
Speaker #3: In the fishing industry in general, which is an important industry for our steel bay in Chile, all of that brings about a slight decrease in market share in the case of Chile.
Speaker #3: In the case of Spain and Portugal, this is our latest acquisition: the Gasib company in Spain and Portugal. We have been seeing very good performance in terms of EBITDA.
Speaker #3: This time, we are seeing a reduction essentially because of the effect of costs—specifically, the increasing costs on margins. There’s a lag in the passing through of these costs to final clients because of the regulated market in Spain.
Speaker #3: So we should see a reversion, at least to some extent, of these compressed margins in the quarters to follow. In the case of the bulk segment, also lower volumes because of an increased competitive landscape.
Speaker #3: So that's it for Energy. We had a very good quarter overall. In the case of the copper segment, through Cumbres and Viñitas, let me remind you we have 40% of this company.
Speaker #3: It is not consolidated, but you can see it showing in net income through equity income, and also in the adjusted EBITDA when we do this adjustment on equity income.
Speaker #3: Once again, a very good EBITDA generation, this time amounting to $287 million for the quarter. This is a result of a very good pricing scenario.
Speaker #3: As you can see in the graph there, prices have even continued to increase on those registered during the quarter. Together with that, a very good cash cost performance.
Speaker #3: In line with what we had announced: $1.59 cash cost for the quarter, and production which is a bit lower than last year, but in line with the mining plans.
Speaker #3: A brief word on our other companies. Not a lot of surprises here. Sonoco is always very stable, this time with a slight increase in results.
Speaker #3: Ijimar, our fishing division, also reported a loss, with a higher loss than last year, essentially stemming from lower catches in the fishing sector. Metrogas and Ajeza remain very stable overall.
Speaker #3: And in terms of highlights for the quarter, let me bring you briefly up to date in terms of our progress in Sukuyu. We have physical progress by the end of July.
Speaker #3: That's 74.5%, which is 6.4% ahead of schedule—so very, very good figures there—with more than 14,000 workers on the site. Engineering, procurement, and civil construction are reaching more than 90% completion already.
Speaker #3: So, also ahead of schedule. In those terms, some other milestones to highlight for the second quarter: the recovery boiler lifting was carried forward one month ahead of schedule.
Speaker #3: Same thing for the completion of the power line commissioning, which was carried forward two months ahead of schedule. And now we're shifting focus for to the electromechanical setup, which is already at 32% progress, which is also 12% ahead of schedule.
Speaker #3: So everything going very well in terms of the industrial portion. In terms of logistics, also making progress. Railroad construction reaching 45%. And also 10% ahead of schedule.
Speaker #3: Rail acquisition completed and on its way from China to Brazil. Some wagons and locomotives already received. All in all, we continue to be on track to start operations in the fourth quarter of 2027 as initially programmed.
Speaker #3: Some more details on a sale of forestry assets that Arauco carried forward in Chile during the quarter: This is an agreement with a Chilean company controlled by a local forestry investment fund.
Speaker #3: This is the sale of eucalyptus forests for approximately 29,500 hectares, only for the wood, not for the land. The total price for the transaction was $217 million, already received by Arauco.
Speaker #3: And as we said before, this yielded an effect on stumpage of $124 million, which forms part of our EBITDA for the quarter, reflecting the operational margins for this plantation business.
Speaker #3: Empresas Copec has agreed to enter into an equity support agreement with Arauco. This is not a capital injection; it is an equity support agreement related to a standby facility for up to $450 million, with funds that will be available from January 2027 to December 2028.
Speaker #3: And drawable by Arauco upon certain triggering events that are well defined in the contract. If the funds are drawn, they are injected into Arauco as equity, not as debt.
Speaker #3: From the current company into Arauco. If they are drawn, it's as equity injected as equity and not as debt. That's why it's called an equity support agreement.
Speaker #3: And this agreement allows Arauco, of course, to obtain additional capital injections, but only if required. This might not be required. The objective, of course, is to strengthen liquidity, gain financial flexibility for Arauco, or accelerate the convergence of credit metrics towards the level defined in Arauco's—and the group's—financial policies.
Speaker #3: So, an additional facility was committed here by the current company to support Arauco. Always in line with the philosophy of permanently reviewing the portfolio of assets and looking for the best owner, Arauco has announced the sale of a stake in Puerto Coronel.
Speaker #3: This is a 50% stake that Arauco held in Puerto Coronel and was sold to a company called Nel Tume Ports for a total price of $65 million, which was received on August 12th.
Speaker #3: And as a result of this transaction, Arauco will be recording a net income or pre-tax gain of $26 million during the third quarter this year.
Speaker #3: We have at Empresas Copec tapped the markets once again and issued bonds for $260 million. This is intended purely for refinancing at the current company or subsidiary level.
Speaker #3: And this is a US dollar–denominated bond issuance for, as I equivalent in US. And this is two series with 10- and 20-year maturities, which were issued at rates of 3.34% and 3.46% for the short and long, or long and longer series, respectively.
Speaker #3: With very convenient spreads. These are rates that are measured in U.S. dollars, so this is plus inflation. This spread for the AO series was the lowest of the year for corporate bonds.
Speaker #3: And, in general, we faced very good conditions, and a very strong demand, which amounted to almost two times the amount offered for both series.
Speaker #3: So, very good issuance here of bonds, which allows us, as I commented before, to continue smoothing out our maturities going forward. Mina Justa underground.
Speaker #3: Mina Justa subterránea continues to make progress in Peru. We, through Mina Justa, made progress in engineering studies, infrastructure development, and permits required for the project.
Speaker #3: So, we continue to make progress across all dimensions here. And just to remind you, this is a project intended to increase research by 30% and expand the total life of mine by five years.
Speaker #3: This will mean an additional production over the life of mine of approximately 500,000 tonnes in total. And we continue to expect the start of operations for the year 2028.
Speaker #3: A brief review of our ESG activity here. Copec continues to make progress in energy transition, adding this time a second large-scale solar generation plant for a total of 85 megawatts.
Speaker #3: With this, the total installed capacity of Copec amounts to approximately 350 megawatts in all. Together with that, Terpel has gone forward with a similar acquisition in Colombia, following exactly the same investment philosophy and the same strategy to face the energy transition as Copec is doing in Chile.
Speaker #3: Copec Flux also inaugurates the first solar plant, this time a smaller plant of 3 or 4 megawatts, but using Tesla batteries—the first to use Tesla batteries in Chile.
Speaker #3: And Arauco continues to deepen the forestry sustainability roadmap, this time with several initiatives related to biodiversity, water, carbon absorption, and circular economy. That is a brief review of the quarter.
Speaker #3: That is the material we had prepared for you. We will now show a brief video on screen, lasting for a couple of minutes, which shows the current status of the Sukuriu construction in Brazil.
Speaker #3: And after that, we will come back for the Q&A session, when I will be joined by Cristian and Gianfranco. Thank you all very much.
Speaker #3: And let's proceed, please, with the video. Thank you.
Speaker #1: Thank you. We will now start the Q&A. If you have a question, please write it in the Q&A section. Please remember that your company's name should be visible for your question to be taken.
Speaker #3: Hello, everyone. Thank you for attending this webcast. We're going to start with the first question, which comes from Ignacio Janos. Gianfranco, this is in forestry.
Speaker #3: Does the forest sale involve any kind of future commitment, or is it simply an outright sale of timber?
Speaker #2: Well, thanks for the question. We sold about 29,000 hectares of eucalyptus plantations in the area of Valdivia for a price of $255 million, including VAT.
Speaker #2: These fibers were sold to a fund, and we don't have a signed commitment for buying that fiber back. But, of course, we have the intention to negotiate some kind of option for buying that fiber, because, I mean, we are in the same zone.
Speaker #2: I mean, the Valdivia Mill uses that fiber, and of course, the fund would like to sell to Arauco. So, we intend to negotiate some kind of agreement, but in terms of an option to buy—not an obligation to buy—from the fund.
Speaker #2: But we have a common understanding that we depend on each other in terms of the use of this fiber. Of course, we sold fiber that is going to be harvested about two or three years from now.
Speaker #2: So the one that we are using currently was not sold, so it's more in the future.
Speaker #3: And Anzu, could you, if you can, comment on the expected cash cost, state delivered to China?
Speaker #2: Well, Sukuriu is a state-of-the-art mill, so it's going to be the biggest in the world. So, I mean, the best place in the world to produce what?
Speaker #2: So, we are expecting a very competitive cash cost delivered to China. Of course, it's not going to happen in the first year because we're going to have a ramp-up, and also we are using more fiber that we bought from third parties at the beginning.
Speaker #2: So I would say, in year three or four, we should be reaching cash costs that would be lower than the ones we already have at Monte del Plata or at MAPA.
Speaker #2: And that should be about between $200 and $240 per ton delivered. That’s going to depend, of course, on the price of the wood that we—and the mix of the wood that we are using at the time.
Speaker #2: If it's 100% from our plantations, we're still buying from third parties. But we should be one of the most competitive mills in the world.
Speaker #3: OK, thank you. Alfredo Schmutzer at Inversiones Marchigue is asking about how much EBITDA improvement in Copec Fuels came from inventory effects versus trading and better fuel performance.
Speaker #3: And looking into the second half, what can we expect on this matter?
Speaker #4: Yeah, thank you for that. Well, as we mentioned during the presentation, EBITDA for energy has been trending up for the last several years, I would say, on the basis of very good performance, commercially speaking.
Speaker #4: And growth of businesses such as lubricants, which is performing very well. But of course, what you say is very true. In this particular year, we have some exceptional effects coming from the revaluation of our inventories and also from additional industrial margins.
Speaker #4: If you look at the EBITDA that we were generating up to last year, for the energy division as a whole, it was around $400 million per quarter—$300 to $400 million per quarter.
Speaker #4: And in this particular year, we have been recording an EBITDA of around $500 million and even $600 million per quarter. So the difference—roughly $150 million per quarter—has to do with these exceptional effects that have taken place during the year.
Speaker #4: Part of this may be reverted if prices go down going forward, and part of it might be more stable over time, which is the portion related to industrial customers.
Speaker #4: This has to do with the fact that Copec is able to provide industrial customers with very large volumes of fuels in this highly volatile environment in a timely fashion.
Speaker #4: And meeting the highest standards. So that part may be more permanent over time, but it's hard to tell because, of course, it will depend on the future evolution of oil markets in terms of trend direction and volatility.
Speaker #3: Thank you, Rodrigo. Juraj Domic at La Reine Dialy is asking which triggers should be activated, or should activate, another support from Empresas Copec to Arauco?
Speaker #3: And which alternatives do you have?
Speaker #2: Well, regarding the ESA that we are probably going to be signing after the shareholders meeting approval, it has certain triggers that depend on the evolution of key metrics of Arauco.
Speaker #2: So, those are designed to be in the range of maintaining the investment grade. So any deterioration that we see in the future or a longer recuperation to normal levels than we are designing in the project should trigger the ask for additional capital injection.
Speaker #2: So, that is designed more or less in the contract. There are other conditions also, and of course, we can always ask. And Empresas Copec can analyze that request.
Speaker #2: So, that is more or less in the terms of the agreement itself.
Speaker #4: Yeah, just to complement that, it is important to have total clarity that this is not an outright equity injection. Rather, it's a standby facility that may be drawn upon by Arauco in the occurrence of certain events.
Speaker #4: And those events, which Arauco was mentioning, are intended to provide additional flexibility and liquidity to Arauco, as well as robustness, and to accelerate convergence towards investment-grade stand-alone investment-grade credit metrics.
Speaker #3: OK, the next one comes from Alfonso Salazar at Scotiabank. Gianfranco, with more integration in China—and if local demand softens ahead—do you see China increasing and sustaining paper exports to other countries?
Speaker #3: That's the first one. And then, when do you anticipate the high cost of wood in Asia to affect paper production in China? And have integrated mills—if you have seen integrated mills—approached Arauco for bulk negotiations?
Speaker #2: Well, it's a bit difficult to anticipate those trends. But what we are seeing is that fiber prices for imports in China have increased, of course, in volume because they have ramped up local production.
Speaker #2: But there are some other pressures in terms of price, in terms of there being some limitations in supply from Indonesia due to some permits being revoked in 2025.
Speaker #2: There are weather-related events. And also, there is some production increase that's coming next year in Oki. So there should be some pressure on fiber cost, imported fiber cost chips in China.
Speaker #2: So, that should put pressure on local production costs of bulk there. In terms of paper export, we have seen that they continue to export paper.
Speaker #2: So I think that that should continue. And local demand for tissue and related paper demand is, I would say, normal in China. So what we have seen is that especially in short fiber, the price we feel that has reached a bottom.
Speaker #2: We recently confirmed maintained pricing at $570 for hardwood, and we sold everything. So we feel that more demand is coming, and that has a lot to do with local pricing of bulk being higher than import prices at this moment.
Speaker #2: It's not very useful, so that supports more demand for hardwood. Of course, the seasonality will start helping us in the coming months because September and October are good months.
Speaker #2: So, we expect that we have seen the bottom in terms of pricing for hardwood. For softwood, it's more difficult because, in softwood, there is a lot of inventory.
Speaker #2: And that is putting a lot of lag in demand and prices for softwood. So we think there will be more difficulty in the softwood market. But in hardwood, we feel that there's more demand and more volume coming.
Speaker #2: And that should fortify the floor around the prices we are seeing right now.
Speaker #3: OK, very clear. Thank you, Gianfranco. At this moment, we don't have any more questions. So, Rodrigo, if you want to make some closing remarks.
Speaker #4: OK, thank you very much. I appreciate you joining in today, and we expect to see you again at the beginning of November to take a look at the third quarter results.
Speaker #4: And in the meantime, as usual, please feel free to contact our Investor Relations department. Thank you very much.
Speaker #1: Thank you. This does conclude today's presentation. You may disconnect now and have a nice day.
