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Copa Holdings, S.A. (NYSE:CPA)

Q1 2009 Earnings Call

May 07, 2009 11:00 AM ET

Executives

Joseph Putaturo - Investor Relations

Pedro Heilbron - Chief Executing Officer

Victor Vial - Chief Financial Officer

Analysts

James Parker - Raymond James

Duane Pfennigwerth - Raymond James

Nicolai Sebrell - Morgan Stanley

Steven Trent - Citigroup

Bob McAdoo - Avondale Partners

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Copa Holdings First Quarter 2009 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions). Just as a reminder, this call is being webcast and recorded May 7th, 2009.

Now I will turn the conference over to Joe Putaturo, Director of Investor Relations. Sir, you may begin.

Joseph Putaturo

Thank you very much operator and welcome everyone to our first quarter earnings call.

Joining us today are Pedro Heilbron, CEO of Copa Holdings; and Victor Vial, our Chief Financial Officer. First, Pedro will open up with an overview of our first quarter highlights, followed by Victor, who will discuss our financial results. Immediately after, we'll open up the call for questions from analysts. We kindly request if you could limit yourself to one question with a brief follow-up, so we can accommodate most questions.

In today's call, we'll discuss non-GAAP financial measures. A reconciliation of non-GAAP to GAAP financial measures can be found in our first quarter earnings release, which has been posted on the company's website copaair.com. In addition, our discussion will contain forward-looking statements, not limited to the historical facts that reflect the company's current beliefs, expectations and our intentions regarding future events and results.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions that are subject to change. Many of these risks and uncertainties are discussed in our Annual Report filed yesterday with the SEC.

Now, I would like to turn the call over to our CEO, Pedro Heilbron.

Pedro Heilbron

Thank you, Joe.

Good morning to all and thank you for participating in our first quarter earnings call. I would like first to begin by congratulating our co-workers for their efforts in delivering another great quarter. As some of you know, we're operating in a challenging environment and their continuous efforts to deliver world class service and financial results are very much appreciated and admired.

Among the main highlights for our first quarter, Copa Holdings reported net income of 71.6 million or diluted earnings per share of $1.65. Excluding the 16.2 million non-cash gain, associated with the market-to-market of fuel hedge contract, net income came in at 55.5 million or diluted earnings per share of $1.28.

This exceptional results came despite a realized field hedge loss for the quarter of 20 million. Our operating margin for the quarter came in at an industry leading 22.3%. Although unit revenues declined approximately 11% inline with our guidance, we're also benefited from a 16% growth in unit costs.

Moreover unit costs, excluding fuel came in at $6.8 representing an 11% decrease year-over-year. I'm also pleased to highlight that our company ended the quarter with a very healthy balance sheet and a very strong liquidity position. In fact, yesterday our Board approved a dividend of $0.37 per share. Payable on June, 16th to all shareholders of record as of May 29th.

This dividend was the same amount for sure as paid in '08, represent a dividend payout of 14% of our '08 net income, which is above the established dividend policy of 10% of annual net income. This action reinforces our Board's trust in the company's performance going forward and its solid financial position and liquidity.

On the operational front, in the first quarter, Copa Holdings took delivery of three aircrafts, one 737-800 for Copa Airlines and two Embraer-190s for Aero Republica. So Copa Holdings ended the quarter with a fleet of 58 aircrafts. 43 at Copa and 15 at Aero Republica.

For Q1 '09, Copa Airlines reported on time performance of 90.6% on the flight completion factor of 99.6%, maintaining its position among the best in the industry. Additionally Aero Republica one-time performance continues to be at outstanding levels, also averaging about 90% for the quarter.

On a more recent note in April, Copa Airlines renewed its IOSA audit certification through 2011. The IATA Operational Safety Audit is a benchmark for global safety management in airlines, and we're very pleased both Copa and Aero Republica meet this standards.

Also recently, our partner Continental Airlines announced its intention to leave the SkyTeam Alliance. As you know for over a decade Copa and Continental have shared a successful and mutually beneficial relationship. And in order to ensure we remain fully aligned with Continental, today we are announcing Copa Airlines will also be leaving the SkyTeam Alliance concurrently with Continental on October 24, '09.

In the mean time, we will continue evaluating future alliances as we maintain our established bilateral relationships. Needless to say, the strong alliance partnership between Copa and Continental along with the many important programs and initiatives we operate jointly such as one path will remain in place as we continue to explore new and better ways to work together to leverage our joint presence throughout the America.

Now turning to the quarter; traffic was very strong, growing almost 12%, and a 17% capacity increase for the quarter. Our yields were down due to a generally weaker demand environment, increased length of haul and a weaker Colombian festival at Aero Republica.

This are numbered lower loan factors resulted in 11% decrease in unit revenues. However, this submit in unit revenues was offset through unit cost improvement. We remain continuously on focused on operating the airline more efficiently and reducing cost that do not impact the quality of our products. This has been and will continue to be one of our key competitive advantages, which is even more important in today's demand environment.

Looking at the second quarter, in general we continue to see traffic growth across most of our networks. Our just released April statistics showed very solid traffic growth of 23.7%. With load factors for the months remaining virtually unchanged despite a 24.2% capacity expansion.

If we improve March and April to normalize the Easter holiday effect, during these two months, traffic grew an average of 16% per month. Going forward, as you can imagine, it has become increasingly challenging to forecast demand, especially to the weakening economic environment, you are... the uncertainty concerning the current swine flu crisis.

Regarding the latter, we'll continue to monitor the situation, which depending on how it develops as the potential or impacting demand for our services. However, on a consolidated basis, Mexico represents only a small percentage of our capacity and revenues. That said, we're seeing reduced travel not only to and from Mexico, but throughout our system, as some passenger postpone or cancel business and leisure travel and have some travel restrictions have been imposed by certain countries.

We have been proactive in this regards having reduced our capacity to Mexico by approximately 20%. The duration of this capacity reduction is currently limited to the month of May. And we expect traffic in the rest of our systems to start normalizing during the second half of this month.

On the economic front, the latest April IMS figures called for a regional GDP construction of 1.5% from the 1.1% GDP growth projected in December. However, Panama still represents a bright spot in the regional and global conflict with GDP expected to grow between 3 to 4%.

As you know, there are several private and public sector mega projects taking place; among them the Panama Canal expansion, which will continue to stimulate the economy and mitigate the effect of the global crisis going forward.

Last Sunday, Ricardo Martinelli, a well-known and successful U.S.-educated business ma won Panama's Presidential elections with a 60% majority vote. We expect to Mr. Martinelli will lead a conservative pro-business government and has promised to make improvements in healthcare, education, transportations and security.

Looking at our fleet plan, and as mentioned in our previous earnings call, we took the decision to return two 737-700 leases that expired in October of this year. And which we had the option to renew. Additionally, Aero Republica fleet transition contemplate the return of four MD-80s by the end of the year. So considering we now expect to receive six aircraft in '09, four 737-800s and two Embraer-190s, our end of the year fleet line is expected to remain flat and 55 aircraft. Nevertheless, our growth for '09 is mostly in place as a result of capacity added in '08.

With regards Aero Republica, we are pleased with the results for the quarter. Operating earnings came in at 6.3 million, which represents an operating margin of 12%. These results were recorded despite 13% drop in revenues, which were affected a drop in yields mainly related to a weaker Colombian currency.

The weaker revenue environment was more than offset through lower CASM, which decreased 30% year-over-year mainly as a result of lower fuel costs, the timing of maintenance expenses and a weaker currency.

Aero Republica's load factor and financial results continue to be positively impacted by their transition to a smaller gauge and more efficient Embraer fleet and growth in their international operations. In the first quarter, Aero Republica capacity flown in Embraer aircraft reached 66% against 50% in Q1 '08.

Additionally, for this first quarter Aero Republica International capacity grew 90% year-over-year, reaching 26% of total capacity. Aero Republica now has a 9% share of Colombia's international market. So as you can see, by all counts, we consider our first quarter results extremely positive.

Our business model continued delivering growth and industry leading margins, even in an extremely challenging environment. Although there's still much uncertainty in how the environment will develop for the remainder of '09, we're very confident on our ability to meet the challenges ahead and emerge in a stronger position.

Our ability to meet this challenges is strengthened by the competitive advantage of being based in Panama, a growing and strategically located country. Having the most complete and convenient network for inter Latin America travel. Maintaining a very competitive cost structure, a strong balance sheet and ample liquidity.

Having a flexible fleet plan, which is needed a loss of... to scale back capacity going forward. And last, but not least, a great team that has won the preference of our passengers time-and-time again.

With that, thank you. Now I will turn it over to Victor, who will go over our first quarter results.

Victor Vial

Thank you Pedro, and good morning everyone. Thanks again for joining us.

First and foremost, let me begin by joining Pedro in congratulating all of our coworkers with yet another outstanding quarter. As Pedro mentioned, Copa Holdings net earnings for the first quarter reached $71.6 million, which translates to diluted earnings per share of $1.65.

Excluding $16.2 million in mark-to-market gains related to 2008 fuel hedge contract and excluding a mark-to-market gain of $2 million booked in Q1 '08, net income increased 47% year-over-year. That's roughly to $55.5 million or diluted earnings per share of $1.28. Strong financial performance and this despite $20 million in realized fuel hedge losses in the quarter.

The first quarter was marked by healthy traffic growth as revenue passenger miles increased 11.6% year-over-year, on 17% capacity expansion. This lead to a decrease in load factor of 3.6 percentage points year-over-year to 74.4%. However, underlying breakeven load factor dropped almost 8 percentage points from 65% in Q1 '08 to 67% in Q1 '09.

In addition, a 6% increase length of haul and a weaker Colombian peso bookings down some 6% contributing to 10.6% year-over-year decline in passenger revenue per available seat mile. However as we expect and our fuel price including realized hedge losses offset most of the impact on lower unit revenues during the first quarter.

In terms of revenues, Copa Holdings first quarter operating revenues came in at $309 million or 4.3% year-over-year increase. With Copa Airlines showing an 8% increase and Aero Republica of 13% decline, the result of lower fares and a weaker Colombian currency.

With respect to passenger revenue, we continue to deliver solid topline growth, during the first quarter of consolidate passenger revenue increase 5% year-over-year to $293 million. On the expense side Q1'09 operating expenses decreased 2% year-over-year while on our unit basis or cost per available seat mile our cost decreased 16% year-over-year to 9.9%.

Excluding fuel, unit cost decreased approximately 11% year-over-year to $0.68 mostly as a result of lower overall distribution costs, timing of maintenance events at Aero Republica in addition to higher aircraft utilization.

Turning now to Copa Holding's main operating expenses compared to the first quarter of 2008. Fuel expense decreased 13%, driven by a 23% decrease in the oil and average price per gallon jet fuel including realized hedge losses offset by 14.5% increase in gallons consumed resulting from increased capacity. That is the benefit increased 80% mainly due to overall increase in operating headcount to the full increase capacity.

Passengers servicing increased 12% driven by an increase in capacity that passengers carry. Commissions decreased 22% driven by lower commission rates, reservation and sales decreased 2%. Maintenance, materials and repairs decreased 3% mainly as a result of a timing of maintenance events at Aero Republica.

Depreciation increased 19% due to additional aircraft repairs and flight operations landing fees and rentals combining fees 13% mainly as a result of increased capacity. Other non-operating income and expense totaled a net non-operating gain of 8.3 million, the main components of which are net interest expense of 6.1 million and $16.2 million non-cash gain associated with mark-to-market of hedged contracts mentioned earlier.

Regarding operating earnings, the company produced $69 million in operating earnings again despite $20 million of fuel hedge losses where year-over-year increase of 33%, while, operating margin remained at 22.3%, almost 5 percentage points above Q1 '08 operating margin.

In terms of fuel hedges as part of the strategic hedging program, the company hedged 36% of its first quarter volume and currently has hedged 30% for the second quarter '09, 25% for the third quarter of 2009, and 16% for the fourth quarter of 2009. In addition, we also have hedged 6% for 2010, and 9% for 2011 to our combination of jet fuel and crude oil swaps.

Moving on to the balance sheet assets, as of the end of the quarter totaled approximately $2 billion while owner's equity reached 700 million and debt plus capitalized leases totaled just over $1.2 billion. Our bank debt at the end of the quarter totaled 927 million, 43% of which is U.S. Ex-Im Bank guaranteed debt. Close to half of our total debt balance has been fixed for up to 12 years and the average blended rate for the first quarter including fixed and variable rate debt came in at a very competitive 3.7%.

In terms of cash, the company closed the quarter with a very strong cash position with $403 million in cash short-term and long-term investment, which represent approximately 31% on last 12 months revenues. This figure includes $29 million of restricted cash of which 23 million are collateral for out of money hedge contracts related to future quarters. In addition, the company has committed lines of credit totaling $31 million.

So in summary, our business model continue to perform extremely well both financially and operationally. Our team is doing a great job of managing costs, our balance sheet and liquidity position are stronger than ever, and we continue be well positioned competitively.

In terms of our guidance, we remain optimistic about our profits for '09. However in light of recent developments regarding the swine flu situation, we continue to maintain a cautious stand on our outlook for the year.

As such, we'll maintain our guidance for full year '09, which is as follows: Capacity in the range of 10 million ASMs were plus or minus 13% year-over-year growth, load factor at plus or minus 74%, compared to 76% in 2008, RASM at $0.126 or 14% year-over-year decrease, as we also expect further softening of yields during the remainder of the year, the price per gallon of jet fuel, net occurring hedges of 2.11 compared to 324 for full year '08; CASM ex-fuel, a plus or minus $0.075, which is basically flat with '08 and operating margins in the range of 16 to 18% compared to 17.4% in '08, and we do still expect to come in on the high end of this range.

With that, I'll turn it over to Pedro for closing remarks.

Pedro Heilbron

Thank you, Victor. And again thank you all for joining us today.

At this time, we will be happy to open up the call for questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). We will take Jim Parker with Raymond James.

James Parker - Raymond James

Hi, good morning guys.

Victor Vial

Hi Jim.

Pedro Heilbron

Hi Jim.

James Parker - Raymond James

Just the question regarding your non-fuel unit costs, you were at 6.8 in the first quarter and your guidance is 7.5 for the year, I believe. I'm curious as some of these very nice cost improvements that you've shown in the first quarter like distribution expense being down substantially. If that's going to continue as well as you say the timing of engine overhauls at Aero Republica, is there some bubble coming out there. So couple of questions there regarding, why your non-fuel unit costs won't be lower, let's say than 7.5 or why you're expecting to actually go up from that level?

Pedro Heilbron

Hi. Yeah, don't forget that 7.5 has a plus or minus in front. So again, we wouldn't be surprised that we come in somewhat below the 7.5. But we do expect, Jim, in the remainder of the year to see a lot more maintenance event. When you look at the number of events coming due in the second, third or forth quarter compared to the first quarter, we do have a significant incremental costs in the first quarter.

If you look at the fee check and a major airplane overhaul, the total cost was roughly 3.5, $4 million. But if you look at second, third or fourth quarter, you're looking at around 16, $17 million in additional maintenance, events related to only fee check and airplane overhaul. So this is somewhat of a bubble there. But also yes, we expect to continue seeing a pretty good performance with respect to distribution costs over the remainder of the year. So we'll be higher than the first quarter. Our guidance is $0.075, slightly below 8. We could come in slightly below that.

James Parker - Raymond James

Okay. I think Duane has a question as well.

Duane Pfennigwerth - Raymond James

Yeah, thanks. Just wondering if you could quantify the impact of currency on your unit revenue and also on your CASM ex-fuel in the quarter?

Victor Vial

Yeah, I'm looking for it, Duane. It's approximately $3 million for the quarter on a net basis. So, on a CASM basis, it doesn't have much of an impact.

Duane Pfennigwerth - Raymond James

Okay. And can you give us any feel for yields in April? And relative to your guidance for a 14% decline in RASM. What you think we could see here in the second quarter?

Pedro Heilbron

In the second quarter, we expect to see, the softness in yields that we've been seeing in the couple of months. Don't forget there is an impact of the evaluation of the Colombian freight when you compare year-over-year. So, that's part of reason we've seen lower yields, and another part of the reason is... there's some softening of demand and also there is an increase length of haul year-over-year. So that explains the lower yield. In the second quarter, we will also need to keep in mind this whole swine flu situation, which obviously will impact load factors as well. Yield is not clear right now what the final impact will be, so it's tough to project, but there will be some impact, especially in May and definitely in the second quarter as well.

Duane Pfennigwerth - Raymond James

So relative to your 14% decline in RASM, do you think it could be within that range?

Victor Vial

Yeah. In the 14% declining RASM, we've already considered that. The only caveat is that, Duane is, again as Pedro mentioned, it's getting very tough right now to project, to predict in this kind of environment. So we feel pretty comfortable with the 14% guidance we provided. That already includes what we are seeing right now in terms of second quarter forecast, low cycle yield. What you're talking we need to monitor everyday, because it's a situation that's developing and we'll be updating our guidance if necessary; but right now, that's how we see it.

Duane Pfennigwerth - Raymond James

Okay. Sorry to be stubborn here, but in Q2, do you expect the RASM decline to be greater or worse than that 14%?

Victor Vial

In the second quarter, if you look at our RASM a guidance for the year, it would implicitly have a higher decrease than the 14% debt.

Duane Pfennigwerth - Raymond James

Okay. Thanks very much.

Operator

We will take our next question from Nicolai Sebrell with Morgan Stanley.

Nicolai Sebrell - Morgan Stanley

Hi. Pedro and Victor. Quick question on... we were talking about first quarter April better than I think anybody expected and then leading into the second quarter due to swine flu probably worse. Do you think the to offset each other? I mean if you're looking at your guidance particularly with the respect to RASM operating margin. I mean it seems like the two were setting each other... offsetting each other and you don't see lot of risks to the downside of your guidance, but is that accurate or how should we think about it? It's the first question.

And the second question, particularly in April, it looks like significant progress had made on for Aero Republica, if you look at the load factor, if you look at the year-over-year traffic growth. Was that pretty much as expected or is Aero Republica doing a little bit better than you had expected? And then if you don't mind just giving a quick comment on the competitive dynamic, what are you seeing in Colombia, are you seeing the U.S. carriers pull back as we might expect them to given the economy in the U.S.?

Pedro Heilbron

In terms of Q2 traffic, it's too early to tell if April is going to offset any stock that derived from the swine flu crisis; it's just too early to tell. Because it's really been maybe a full week or 10 days, where we've seen traffic really affected by this whole thing and we do not know how long it's going to last. So, again it's just too early to tell.

In terms of Aero Republica, they did slightly better than expected for a couple of reasons. One, most importantly they are doing great or doing very well. I think that's number one. Also April '08 went very, very weak for them. They did not do that well April '08. And then on top of that, Easter holidays fell in April this year rather than in March like the previous year. And it has a greater impact on the Aero Republica segment, not on Copa. So I think those three factors contributed to a very strong April for Aero Republica. In terms of competition, we've seen no changes... no significant changes since our last earnings call, either in terms of new capacity or earnings pulling back.

Nicolai Sebrell - Morgan Stanley

Okay. Back to Pedro (ph) just quickly. So the 60... the load factor that's been as high as in the low 60s, just going off memory, so might be a slightly different number, but I think that's the right range. On Aero Republica, we could expect that on average. Obviously, the seasonality, but on average to continue through the end of the year swine flu aside, let's forget swine flu.

Victor Vial

Yeah. I would say so. It's Victor, Nic; I would say so. Yeah, and in our 74% plus or minus guidance, we are assuming that our fully there will be in the low 60s range.

Nicolai Sebrell - Morgan Stanley

Okay, great. Thanks guys.

Operator

We will take our next question from Steven Trent with Citigroup.

Steven Trent - Citigroup

Yes, good morning gentlemen.

Pedro Heilbron

Hi.

Steven Trent - Citigroup

Hi, one or two quick questions for me. In terms of your fleet going forward, I know you are getting rid of the MD-80s this year. How should we think about long-term maintenance expense? In other words, as you get these new aircrafts, the E-190s and then the Boeing 737 and GEs. What's sort of the grace period from the maintenance standpoint before we start to get into, let's say regular medium to long-term maintenance.

Victor Vial

On the Embraer, you're talking about two to three year honeymoon; in terms of the cost, when you look at it in terms of maintenance CASM, we don't expect a significant difference in the next few years in our maintenance CASM. On the one hand you have Embraer-190 coming in... they do have less fleets to have an impact on maintenance capital. They do have a honeymoon, so that help fuel also. And we also need to consider the NGs, which we have a fleet of NGs that is also getting older. So at the end of the day, when you look at the full picture, maintenance capital going forward should not vary much in next few years.

Steven Trent - Citigroup

Great. Thanks, Victor. The only other question in terms of Mexico, can you tell me roughly speaking, approximately what percentage represents of available seat miles, let's say, on a normalized basis?

Pedro Heilbron

Mexico is around 6% of our capacity and revenues also.

Steven Trent - Citigroup

Great. And that of course excludes that 20% cut you discussed earlier?

Pedro Heilbron

That's correct.

Steven Trent - Citigroup

Oh, great. Perfect. Thank you, gentlemen.

Pedro Heilbron

Thanks.

Operator

We'll go next to Mike Linenberg, Banc of America Merrill Lynch.

Unidentified Analyst

Hello everyone. This is actually Alex Louanzen (ph) on behalf of Mike. London on behalf of Mike. I just wanted see if you had an updated P&L impact having given what the fuel curve has done since your last update. The P&L impact of non-operating mark-to-market costs for the remainder of the year?

Victor Vial

Sure. And actually let me go over the full picture. If you look at the... for the full year including Q1 '09 and then you come back into how much this second and our forth quarter. For the full year, we expect a realized loss of approximately $50 million as a result of the hedges we have in place, given the curve... the current curve.

In terms of mark-to-market, you're basically talking about our $45 million gain, so for full year '09 net-net, when you take into accounts realized, fuel hedge losses and mark to market gains and they're pretty much watch, and this first quarter as you know, the realized hedge loss was $20 million, and the mark-to-market gains totaled around 16 million.

Unidentified Analyst

Okay. And then just finally, do you have any estimates for... I know in April, ASMs have increased 24% on a consolidated basis. Do you have an estimate for the second quarter ASMs by carrier and also for the remainder of the year?

Victor Vial

Sure. In terms of ASM growth in Copa, I don't have right here, but I have it in on the top of my heard. Copa basically should be growing around 16% year-over-year. And Aero Republica should be flattish to a couple of points up.

Unidentified Analyst

Okay, great. Thanks very much.

Operator

(Operator Instructions). We will take our next question from Bob McAdoo with Avondale Partners.

Bob McAdoo - Avondale Partners

Hello. Just a couple of questions. You made the comments on Colombian currency in fact. How much of your revenues and expenses are actually dominated in Colombian currency?

Victor Vial

The Colombian currency... in terms of revenue, Colombian currency 20% approximately of total revenues when look at Copa Holdings consolidated. And in terms of expense, it's roughly 10 to 12% of the total, again looking at Copa Holdings consolidated.

Bob McAdoo - Avondale Partners

Okay. So I have different question. You talked about lower commission rate did you see latterly decided to pay your agencies less amount or is there some of the structural shift in terms of where the business is coming from, what's going on there?

Pedro Heilbron

It's a combination of factors. One is maybe being more surgical about which fair classic and markets are incentivize with back-end commissions. And also, each there is a smaller segue to lower revenues in certain markets and agencies not hitting the thresholds to gain certain levels of the back end commissions. So it's a combination again of hitting the target and also our management of the program.

Bob McAdoo - Avondale Partners

So the kind of current run rate that we saw in this quarter, can we kind of think that that's where the legal balance of the year?

Pedro Heilbron

We may invest some of it back. So, I don't think it will stay the same. Some of those savings are going to... I mean, most of those of savings will remain, but the rate may change.

Bob McAdoo - Avondale Partners

Okay. And just generally in terms of sales and distribution cost generally, anything going on there that we... that's meaningful, we can worry about or think about?

Pedro Heilbron

Not really. For remainder of the year, we do not expect major changes from where we are now.

Bob McAdoo - Avondale Partners

Okay.

Victor Vial

The only thing I would add is that: as always, we have an opportunity in terms of direct sale, but it's always something we will be pushing, and we will continue pushing, so...

Bob McAdoo - Avondale Partners

In terms of you get anything, (ph) use your website, you mean?

Pedro Heilbron

Sure.

Bob McAdoo - Avondale Partners

Yeah, okay. Very good, thanks.

Operator

(Operator Instructions). And at this time, it appears we have no further questions.

Pedro Heilbron

Okay, thank you all again. Rest assured, our team remains focused on the opportunities and challenges ahead. And more committed than ever on delivering world class results and value to our shareholders. So, we'll see you again at the end of the next quarter. And have a very good day.

Operator

This does conclude today's teleconference. And thank you for your participation.

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