LATAM Airlines Group S.A. Management Discusses Q1 2013 Results - Earnings Call Transcript

May.15.13 | About: LATAM Airlines (LFL)

LATAM Airlines Group S.A. (NYSE:LFL)

Q1 2013 Earnings Call

May 15, 2013 11:00 am ET

Executives

Alejandro de la Fuente Goic - Chief Financial Officer

Cláudia Sender - Vice President of Sales & Marketing and Director

Jorge Vilches

Gisela Escobar

Andrés del Valle

Eduardo Riquelme

Analysts

Savanthi Syth - Raymond James & Associates, Inc., Research Division

Duane Pfennigwerth - Evercore Partners Inc., Research Division

Michael Linenberg - Deutsche Bank AG, Research Division

Eduardo Siffert Couto - Morgan Stanley, Research Division

Stephen Trent - Citigroup Inc, Research Division

Bianca Faiwichow

Brian Foster

Operator

Good day, everyone, and welcome to the LATAM Airlines Group earnings release conference call. Just a reminder, this conference is being recorded. LATAM Airlines Group earnings released for the period was distributed on Tuesday, May 14. If you have not received this, you can find it on our website, www.latamairlinesgroup.net, in the Investor Relations section. At this time, I would like to point out that the statements regarding the company's business outlook and anticipated financial and operating results constitute forward-looking comments. These expectations are highly dependent on the economy, the airline industry and international market. Therefore, they are subject to change. Now it is my pleasure to turn the call over to Mr. Alejandro de la Fuente, Chief Financial Officer of LATAM Airlines Group. Mr. de la Fuente, please begin.

Alejandro de la Fuente Goic

Okay. Thank you for joining us today. This is Alejandro de la Fuente, and with me on the call are Cláudia Sender, from our domestic Brazil operation; Jorge Vilches, from our International Passenger division; Eduardo Riquelme from our Cargo business; Andrés del Valle from our Corporate Finance Department; and Gisela Escobar, our Investor Relations Officer.

We hope that you have all received the press release and have been able to access the webcast presentation on our website for a better understanding of our consolidated results during the first quarter 2013.

Okay, on Slide 3, you can see the main highlights of LATAM Airline Group's results for the first quarter as compared to the pro forma numbers for the first quarter 2012. The company showed a very significant improvement in operating results for the quarter. This reflects a recovery of the business operations, as well as progress in the merger and synergy generation. Operating income reached $114 million, an increase of 150% compared to first quarter 2012 and operating margins reached 3.4%. Total revenues increased by 1.5%, reaching the $3.4 billion, driven by growth in passenger revenues. Cargo revenues continued to reflect the challenging global environment, with a decline of 3%. Operating cost reached $3.3 billion, decreasing 0.6% as compared to first quarter 2012. Net income reached $43 million in first quarter compared to a pro forma net income of $84 million for the same period in 2012. The decline in net income is due mainly to a foreign exchange gain of $133 million recognized at TAM during the first quarter 2012.

Taking a closer look at passenger operations on Slide 4, you can see in detail the evolution of the business during the quarter. Total passenger traffic for LATAM Airlines Group grew 6.1% while capacity increased 4%. Consequently, load factor reached 78.8%, an increase of almost 2 points. Passenger yields declined 4.3%, mostly due to the impact of the depreciation of the Brazilian reais on yields in the domestic Brazil operation. As a result, revenues per ASK declined 2.4%.

LATAM continued to have a very diversified passenger network. On Slide 5, you can see in detail our capacity expansion by market. Passenger capacity growth this quarter was mainly focused on domestic routes in LAN's Spanish speaking countries, especially Chile and Peru, as well as on international routes. During the first quarter 2013, we continued to face a challenging environment in our international passenger operations.

Since the second half of 2012, we have seen significant pressure from international competitors adding capacity to South America. This has led to downward pressures on fares as well as aggressive commercial conditions offered through distribution channels. As a result, the market, in general, has suffered from lower yields and load factors.

Within this context, both LAN and TAM have also made significant increases in capacity, with total international capacity for the group increasing by 12.3% in the quarter. This increase has come from routes that are strategic and profitable for the longer term. However, and especially considering the current market environment, competitive pressure resulted in a 4-point decline in load factors, which has led to lower revenue per ASK in this business unit. The results were also impacted by the quarter by the grounding of LAN's 3 Boeing 787s following the recommendation of the FAA. This aircraft continued to generate fixed costs related to crews, maintenance and financial expenses. We're in the process of making the necessary battery changes and expect to be able to renew their operations in the near future.

We're taking specific measures to improve the profitability of our international operations. First, we are reducing capacity growth and are evaluating alternatives to rationalize our fleet plan. We plan to cut certain local routes from Brazil, especially from Rio de Janeiro to destinations such as: Frankfurt, Paris and Orlando. Second, we will begin operating Boeing 767s on TAM's long-haul routes. These aircraft have winglets that contribute to reduce their fuel consumptions and have an efficient configuration. They also provide an improved passenger experience since they include a premium business class with full flat seats.

Finally, starting in the third quarter, we expect to be able to market the codeshare agreement between TAM and American Airlines, providing more options for passengers who will be able to take advantage of the broad network of American Airlines' destinations throughout North America. As a result of this initiative, we expect a solid recovery over the coming quarters, especially after the low season in the second quarter of the year.

On Slide 6, we can take a closer look at the Brazilian domestic passenger operations. We have made significant progress in the turnaround of this business unit. We continued to focus on capacity seating, with a 9% reduction in ASKs during the first quarter 2013 as compared to the first quarter 2012.

We are also focused on improving market segmentation and revenue management in order to offer the right conditions to each type of passenger and stimulate demand with more price-sensitive clients. As a result, we are happy to see solid load factors that are consistently at least 10 points higher than last year. Also, we have seen low double-digit improvements in revenue per ASK as measured in reais. The results in U.S. dollars were impacted during the first quarter by 15% depreciation of the Brazilian currency. We remain convinced that capacity discipline and adequate segmentation of the market will provide the basis for continued healthy load factors and expect continued improvement in operating results in 2013. We have also announced a capacity reduction of between 5% and 7% in ASK for the domestic Brazil operation during the full year 2013.

Please turn to Slide 7 for an overview of LATAM's Cargo operations. Cargo traffic remained flat, while capacity rose 3.8%. This led to a 56.1% load factor, 2.2 points lower than 2012. The increase in cargo capacity during the quarter is a result of the incorporation of 2 new Boeing 777 freighters during second half of 2012, as well as an additional belly capacity, partially offset by capacity adjustments in the freighter fleet.

On the other hand, we continue to see weak cargo demand in line with global traffic trends, mainly due to weak demand for imports into Latin America, especially Brazil. This was partially offset by strong demand for commodities from South America, including fresh salmon, asparagus and berries. At the same time, both regional and international competitors continued to be active in the region.

The yield decline of 3.2% reflects the balance between slow demand and an increasing competitive intensity on southern routes, as well as the depreciation of the Brazilian real on the domestic Brazilian cargo revenues.

Nevertheless, the company continued to optimize the utilization of the bellies of its passenger aircraft to maximize synergies associated with the company's integrated passenger cargo business model.

Okay, please turn to Slide 8. The company showed a 0.6% decline in total operating expenses, cost per ASK equivalent declined 4.5% as cash x fuel declined 6.5%. The main efficiencies came from wages and benefits, commission and other operating expenses. Wages were positively impacted by the depreciation of the Brazilian real despite the 3% increase in [indiscernible]. Fuel costs increased 3% driven by a 1.5% increase in consumption.

Please turn to Slide 9 for an update on the expected synergies from the merger.

We remain confident in our synergy target of between $600 million and $700 million to be fully achieved by the full year after the merger, June 2016. Important progress were made in recent months with the codeshare agreement signed between TAM and American Airlines, as well as with LATAM's election of oneworld as its global alliance. We have begun to harmonize the airline frequent flyer programs, as well as advance on cost initiatives related to contracts, renegotiations and process standardizations. We expect merger synergies to be between $250 million and $300 million during 2013.

Furthermore, we expect to continue to incur certain costs related to the integration process. During this period in which cargo traffic has been impacted by macroeconomic conditions, the ability to redesign the seating of south-bound belly capacity and especially the implementation of connections in the Guarulhos and Galeao [ph] airports, has been key to better fill TAM's bellies -- belly capacity. The ability to consolidate cargo traffic to the U.S. and Europe at these airports is an opportunity that we did not have prior to the merger. With this new possibility, strong exports, mainly of perishable goods from the southern cone [ph], have been able to mitigate the impact of the weak Brazilian outbound market and weak southbound routes.

Please turn to Slide 10 to see our estimates for ASK and ATK growth for 2013. Regarding passenger operations, we expect capacity growth of between 2% and 4% for the group. For 2013, we expect to see a small increase in the international passenger business in order to adjust capacity to market conditions. TAM's domestic passenger ASKs in the Brazilian market are expected to decrease between 5% and 7% during the year, in line with the company's strategy to adjust capacity in this market. We will continue to see strong growth in our domestic operations outside Brazil.

Regarding cargo operations, LATAM expects cargo ATK growth between 2% and 4% for full year 2013, mainly driven by the incorporation of 2 Boeing 777 freighters in September and October, 2012, as well as additional belly capacity.

On Slide 11, you can see our net fleet deliveries for the coming years. Our fleet plan represents a CapEx budget of $4.8 billion for the next 3 years. We feel that a modern and efficient fleet with the correct aircraft represents a significant competitive advantage in this industry. On June 11, LATAM will hold an extraordinary shareholders' meeting to approve an equity offering of $1 billion. According to Chilean law, the placement will be through a preemptive rights offering for existing shareholders, both the Cueto and Amaro groups, the controlling shareholders of LATAM and of TAM have stated their intention to subscribe their proportional stakes in the rights offering. The use of proceeds is to finance our fleet expansion and renewal for the coming years. As you know, we financed approximately 80% of our CapEx with debt, mostly x book will be financing at very attractive rates. However, we financed a portion of our fleet's CapEx with our own results.

In addition, we have non-fleet related CapEx, including an investment necessary to achieve the merger synergies such as IT and information system projects.

Through this equity offering, we also aim to improve our capital structure in order to accelerate the recovery of our investment-grade rating in the medium-term. Obviously, we will not improve our rating only with the aid of the offering but it will contribute to strengthen our liquidity position. Liquidity is an important factor for the rating agencies who will recover the rating only to the extent that we can show solid cash flow generation from our operations, which is something that we are on track to achieve.

On Slide 12, you can see our consolidated fuel hedge position for the upcoming quarters. Since the closing of the transaction, the hedging function is centralized for both LAN and TAM. As you can see on the slide, we have hedged 67% of our estimated fuel consumption for the second quarter of 2013, 26% for the third quarter and 16% for the fourth quarter.

In closing, we can say that the past quarters have been challenging as we worked through the merger challenges of LAN and TAM in a difficult competitive environment where we are dealing with a variety of standard pressures in our different markets. Nevertheless, we have made significant progress in terms of harmonizing internal processes, integrating the business units and defining the long-term strategy for the group. More importantly, we remain absolutely convinced by the strategic rationale behind the merger of these 2 important airlines and of the value of creating the Latin American leader. We are confident that we will see the results of this strategy over the coming quarters.

Now we will be pleased to answer your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question, which comes from the line of Savi Syth from Raymond James.

Savanthi Syth - Raymond James & Associates, Inc., Research Division

I just wanted to -- in Brazil, you said that the RASK was up, low double-digits on a reais basis, I'm wondering how that's continuing in April and beyond? And what your outlook is for the domestic Brazil market? And if you think, given the low GDP environment, if you need to take capacity down further?

Cláudia Sender

This is Cláudia Sender from Brazil. It was a little hard to understand the question. Would you mind repeating it? I'm sorry.

Savanthi Syth - Raymond James & Associates, Inc., Research Division

Sure. Just, maybe -- is the double-digit growth in RASK continuing in Brazil? And I'll follow up with another question.

Cláudia Sender

Yes, absolutely, we expect both our load factors and our passenger revenue per ASK to continue at the same double-digits trend during the second quarter of this year. The second semester of last year was a lot stronger in load factor turned, since we started our strategy -- to change our strategy in the second semester of last year, then, we expect to still have some growth and again, very close to the double-digits, but we expect to have a significant improvement versus last year throughout the year as well.

Savanthi Syth - Raymond James & Associates, Inc., Research Division

And the change in your -- the TAM's revenue strategy, you changed it to do more revenue management and increase the load factors. How have competitors responded? And has there been a change in the response?

Cláudia Sender

Well, I think each competitor in Brazil has adopted a different strategy. And I think we're segmenting our markets in a much smarter way than we used to do in the past. Therefore, we've been able to increase the demand in the market without significant capacity increase, which was the strategy in the past. So I think each competitor had been targeting very different strategies, and I think we've been efficient in the past, I would say, 9 months, to stimulate traffic without deteriorating the RASK numbers.

Operator

The next question we have comes from the line of Duane Pfennigwerth from Evercore Partners.

Duane Pfennigwerth - Evercore Partners Inc., Research Division

I wanted to ask another Brazil question, specifically, on your cargo operations. What do revenue trends for cargo look like if you exclude Brazil from the mix?

Alejandro de la Fuente Goic

First of all, it's important to comment regarding Brazilian markets that they have been very stable. If we exclude Brazilian markets from the cargo mix, we see a positive trend starting since the beginning of this year. Basically, we saw or we believe that the market touched bottom at the end of 2012, beginning in 2013 and then, we have seen a steady growth on the cargo markets, especially the southern ones and mainly Brazil. And this is a trend that we expect that will continue until the end of the year.

Duane Pfennigwerth - Evercore Partners Inc., Research Division

And then, with respect to the weakness or the relative weakness in Brazil, what do you attribute that to? I mean, is there any way to segment, is it more economic growth-related or is it competitive pressures? Which would you attribute the weakness more to?

Alejandro de la Fuente Goic

I think it's a mix of both. Obviously, economic growth is affecting the traffics or the import traffics to Brazil but also, the competitive intensity that we have seen since 2012, also is affecting our ability to capture traffics into these countries.

Duane Pfennigwerth - Evercore Partners Inc., Research Division

Okay. So on that, on the import weakness, specifically, have you seen any change year-to-date in Brazil?

Alejandro de la Fuente Goic

Yes. As I've commented earlier, we have seen a positive trend in the last 2 or 3 months, with traffic that are starting to grow but haven't reached or haven't still reached the levels of 2012.

Duane Pfennigwerth - Evercore Partners Inc., Research Division

Okay, I thought the comment was that, overall, that's true or x Brazil, that's true, but you're seeing that same trend in import improvement within the Brazilian cargo market?

Alejandro de la Fuente Goic

Yes, it's the import market.

Operator

Next question we have comes from the line of Mike Linenberg from Deutsche Bank.

Michael Linenberg - Deutsche Bank AG, Research Division

I just want to go back to the unit RASK performance for the quarter. So Brazil was running up double-digit, it looks like that international was weak and then, it looked like that the domestic markets for the Spanish speaking countries did well. Can you put some numbers on that? Can you give us a feel for what those, how much international is down and how much Spanish speaking domestic was up? And -- but then, I guess, the other, the last region is the intra-Latin America flying, the flying between countries.

Jorge Vilches

This is Jorge Vilches from the international business. Yes, the decreasing RASK that we were seeing in the first quarter is basically coming from our Brazil international operations, and that's basically because of the extra additional capacity that has been put in the Brazil -- U.S. market especially. Not only TAM extra capacity, we've increased a lot up to Miami and New York with the new Boeing 777, the 777, but also, American did the same thing, increasing a lot of their capacity. And that, as you know, when we're talking about 60% or 40% increase in capacity, the demand takes a while to react. I mean, it doesn't fill the plane so suddenly. So that's basically where we see those declines. What we see for the second quarter and the third quarter is that improving in RASK because of an improving in load factors and yield in these roots. So this is getting much better for -- from now on. And in LAN operations, these increases in capacity has been much more concentrated in the operations to Miami and New York and -- but we're keeping that extra capacity with good RASK. So it's basically TAM and to the U.S.

Michael Linenberg - Deutsche Bank AG, Research Division

Okay. And just to follow up on that point, it's -- some of the Brazil international has been weaker. As we move into the latter part of the year, when you include the capacity cuts in some of the Brazil markets like Rio to Europe and the American Airlines codeshare comes into effect, is it possible that we will see unit revenue improvement in the international markets? Should we be anticipating, sort of, all things being equal with the economy right now, so we don't see much change? Is it reasonable to assume that we could see RASK, international RASK into positive territory by the time we get into the third and fourth quarters?

Jorge Vilches

Yes, definitely. Actually, we are taking actions that are taking us into that direction. The capacity reduction that we are endeavoring in the European routes from Rio, it's something that is going to give us good results because some of that traffic, we can continue transporting them through São Paulo, through our main hub, so that's not going to be affected but definitely, we're going to increase our RASK to Europe. And considering the U.S. and the codeshare with American, this is definitely one of the key success factors that are going to drive the second semester of this year. Currently, we have a very small market share in our offline markets in the U.S. because our partner in -- United, doesn't have a hub in Miami. Now that we have our codesharing in place in the third quarter with American, we're going to be able to send passengers to the offline markets that is a much bigger market than we -- than the one that we participate today in our gateways. So this is definitely going to be key for the second semester in improving RASK in the routes to the U.S.

Michael Linenberg - Deutsche Bank AG, Research Division

Okay. And then, just one last one, if I could squeeze in. How -- when we think about some of these measures, and let's take, for example, the Rio to London Heathrow market. So you have an A330 flying that 3 times a week nonstop now and that's going to convert to a 767-300, it seems like there's a cost benefit and a revenue benefit. So not only will it help your RASK but I think, putting the right airplane in there with the right configuration and given the size of your 767-300 fleet, plus your freighters, it seems like that there's a real opportunity on the cost side. So when I think about margin improvement, could we see -- I don't know, 5, 10 points of operating margin or EBIT or pretax margin improvement by doing that swap? And how should we think about that as analysts?

Jorge Vilches

Well, you're absolutely right. This is going to have definitely, I mean, an improvement in RASK and also an improvement in cost per ASK x fuel, definitely, and cash fuel. If we see the 777 that we're going to fly to London compared to a A330 -- and if you compare it with the older A330s, it goes up to 20% cash increase -- cash [indiscernible], excuse me. So this is definitely going to be key -- [indiscernible] revenue side. And that's something that we didn't have in our previous planes, so we're very confident that this is the type of product that our corporate markets need to the U.K. and also, we're going to capture on this cost advantage.

Operator

The next question we have comes from the line of Eduardo Couto from Morgan Stanley.

Eduardo Siffert Couto - Morgan Stanley, Research Division

I had a question on operating margins. Despite the improvement, year on year, the consolidated operating margins, they remained at the low single-digit level. I was just wondering if, is it because of Brazil? And are you reporting operating losses in Brazil? Just to give us some color, because I think the Brazilian operations, they have lower margins and given the low single-digit for consolidated numbers, so I was just wondering if Brazil is still negative in terms of operating numbers.

Gisela Escobar

Yes, this is Gisela. We, as you know, are not reporting our business unit results in detail for each of the different business units. So -- and I think what we can definitely say is that we are seeing a potential improvement as we advance with all of the initiatives both in the domestic Brazil and in the international operations. But we can't provide much more detail regarding the actual profitability of the business units, definitely.

Eduardo Siffert Couto - Morgan Stanley, Research Division

But Brazil is just still lower than the other regions or not, Gisela?

Gisela Escobar

Well, the domestic Spanish speaking countries, which continue to operate in the same way that they had prior to the merger, yes. But if you look at the international and the cargo business units, for example, right now, they're integrated, so the international business unit is 1 business unit, where the network includes the Brazilian operations, also includes the Lima hub and all of the other -- it's being managed as 1 single network and in 1 single business unit. So there are certain routes, Brazilian operations that are more profitable than others, there are certain routes in the operations in the other parts of the network, also, that are more profitable than others. And regarding the domestic operation, as we've described, there is definitely a sequential improvement that we expect to continue for this year.

Eduardo Siffert Couto - Morgan Stanley, Research Division

Okay, now it's clear. And just one final question, also, on the Brazilian strategy, now the company was raising load factors significantly especially in the first quarter. But on the April numbers, the load factor expansion was smaller, around 4 percentage points compared to almost 10 that you're doing in the first Q, I was just wondering if there was any change in the load factors strategy in Brazil, or we should continue to see something more towards the high single-digit load factor expansion in the domestic Brazilian market?

Cláudia Sender

As I mentioned before, our expectation is to keep growing the load factors numbers throughout the first semester. The second semester has a little less opportunity, given that the second semester of last year was already a high load factor semester. Having said that, we still expect to have some more demand growth for that period. April was a month when we had a little softer market and a little softer market share in consequence of that. However, we do expect to go back and get back to our very close to 80% load factor numbers going forward.

Operator

The next question we have comes from the line of Stephen Trent from Citi.

Stephen Trent - Citigroup Inc, Research Division

Two questions for me. The first one, when I think about the balance sheet and the potential to eventually recover your predecessor's investment grade rating, outside of the equity offering and better operating cash flow, are you also considering other things, other tools to potentially boost your credit rating such as some strategy via Multiplus or maybe securitization of receivables? That's my first question.

Andrés del Valle

Andrés del Valle here. No, nothing -- for Multiplus, we have no news on that front, and we are engaged in a fruitful receivable deal that we expect to go to market in early June. And that, of course, should also boost our liquidity, coupled with the capital increase that has been announced for, most likely, Q3 this year. We should be seeing a very comfortable pile of cash towards the latter part of the year.

Stephen Trent - Citigroup Inc, Research Division

Great. And if I may, if I heard you correctly, you said next month, there's going to be a receivables deal coming? And any color on, if you're allowed to say, what might be the size of it?

Andrés del Valle

Next June or early June. Thinking about size, roughly $450 million, in that range.

Stephen Trent - Citigroup Inc, Research Division

Okay, very helpful. And just one other question. When I think about the cargo market, you guys did a nice job of highlighting what's been broadly going on in terms of underlying demand, but we've also seen the likes of FedEx undertaking some acquisitions in some of your markets. Are you seeing or concerned about any big competitive moves over the next couple of quarters or maybe competitors acting irrationally on the cargo side?

Eduardo Riquelme

This is Eduardo Riquelme from the Cargo division. No, we don't see any big moves from other competitors other than the same competitors increasing their intensity, especially, out of Europe. European carriers have been trying to -- not only European but also, Middle -- from the Middle East, like Emirates, and then, there are also announcement from others like Qatar to be flying into Brazil, South America. So more than changes in the -- in our competitors, it's the intensity of the ones that we have seen in the past. Also, Tampa made a fleet change in terms of replacing their 767s, with the A330 freighters. But other than that, no, we don't see any further changes. And regarding what you mentioned about FedEx, yes, they did buy a pretty large Brazilian domestic operator, express operator called Rapidão Cometa, but I have to say to that, that they are more customers of ours more than competitors. FedEx and the integrators, even though they fly some segments with their own operations, their own freighters, they are more customers of us in cargo airlines than competitors. They really move in a different niche, which is the express market, more than the general cargo, so we see them more as our customers more than our competitors.

Operator

And the next question we have comes from the line of Bianca Faiwichow from GBM.

Bianca Faiwichow

I just have very 2 quick questions. The first one is on timing for your capital increase. When should it take place if, of course, it is approved in the shareholders' meeting? And the second question is, what's the percentage of wages and benefits in reais?

Gisela Escobar

Regarding the timing of the capital increase, we would target, at this point, definitely towards the end of the third quarter. We still, obviously, haven't had it approved at the shareholders' meeting and haven't finalized the detailed schedule, but it would be around probably September, October this year. Regarding the wages and benefits line, we have approximately 50% of the wages costs that are denominated in reais.

Operator

The next question we have from the line of Brian Foster from CreditSights.

Brian Foster

You guys have been talking about potentially moving the TAM fleet up to the LATAM Airlines Group for some time now. I was just curious, is there something in particular that's complicating that process?

Andrés del Valle

Nothing, no -- well it's -- got some quite -- a lot of detailed, there, analysis, we have that thing, we're getting to the finish line. And this -- well, it should be kicked off maybe the next 2 months. And nonetheless, that's a sort of a slow process, we're talking about the 160 aircraft to be moved up to the level of LATAM. So we will group them in different families, but this is definitely something that we have, I mean, going forward and commencing this year.

Brian Foster

And just to confirm, the TAM debt is also going to move up with the fleet, correct?

Andrés del Valle

The TAM debts?

Brian Foster

Yes.

Andrés del Valle

The TAM debt correspondent to the aircraft, yes.

Operator

Thank you. At this time, I'm showing we have no further questions. I would now like to turn the call back over to Mr. Alejandro de la Fuente for any closing remarks.

Alejandro de la Fuente Goic

Alejandro de la Fuente. Thank you, again, for joining us today. Please feel free to contact our Investor Relations department if you have any additional questions. We look forward to speaking with you again. So thank you very much, and goodbye.

Operator

Thank you, ladies and gentlemen. That concludes today's conference call. Thank you for your participation. You may now disconnect. Have a great day.

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