HIVE Blockchain Technologies Ltd (OTCPK:HVBTF) Q2 2019 Earnings Conference Call November 30, 2018 8:30 AM ET
Karlene Collier - Head of Communication
Frank Holmes - Interim Executive Chairman
Marco Streng - Vice Chairman
Olivier Roussy Newton - Interim President
Darcy Daubaras - CFO
Good morning, everyone. I’d like to welcome you to the webcast following HIVE's Second Quarter 2019 Financial Results. I’m Karlene Collier, Head of Communication for HIVE. Joining us on the call today is Frank Holmes, Interim Executive Chairman; Marco Streng, Vice Chairman; Olivier Roussy Newton, Interim President; and Darcy Daubaras, HIVE's recently appointed Chief Financial Officer.
I will now turn over to Darcy
Before we begin, I’d like to remind you that today’s presentation we will be making comments containing forward-looking information. I invite you to read our financial disclosure for some of the risks and uncertainties that may affect HIVE's performance in the future. And now as such, actual results may vary materially from the views presented today. For further information on these risks and uncertainties, please consult our most recent MD&A and our filings on SEDAR.
Unless otherwise indicated. Please note all figures discussed today are in U.S. dollars.
I’ll now turn the call over to Frank Holmes.
Thank you, Darcy, and thank you Karlene, and also thanks everyone online for joining our second quarter earnings call. As you know, I’m Frank Holmes, I’m the Chairman -- Independent Chairman of HIVE Blockchain, I am assuming responsibilities as Interim CEO along with Olivier Roussy Newton as the Hive's Interim President, and both he and I taken on this responsibility without being paid to reset and get prepared for HIVE 2.0, which we’ll talk about.
So I think you’ll find it quite exciting and Olivier is the Co-Founder of HIVE, and I am also joined from China, Marco Streng our Vice Chairman who recently came on the Board, and I am also thrilled that Darcy Daubaras is Hive's recently appointed CFO who has tremendous experience in the capital markets, who will be addressing and [indiscernible] on this quarter.
As we become more independent and have a full time CFO, like we have mentioned earlier Stephan Metz in Switzerland well highly respected Tax Lawyer, has joined to us to run the country, and all the issues we have to deal in managing offshore mining; and Karlene Collier our Director of Communications, you’ve already heard from.
I like to just remind everyone that HIVE’s corporate strategy is and was and is to rapidly acquired develop and operate data centers in cool climates, such as Iceland, Sweden with access to reliable clean and inexpensive power and politically safe and stable jurisdictions where the current purpose of digital currency mining. The Company recognizes income from the provision of transaction verification services, known as cryptocurrency mining, which the Company receives digital currencies and report some at their fair value on the time received.
In May of this year, the Company completed the acquisition of land in Norway which provides the Company with access to potential competitive power to supply a platform for future growth of its computing capacity. There is a big movement globally with the growth of Amazon, now artificial intelligence, all those data mining is using the cloud and the inexpensive data centers all over the world. And the hottest new place is gaming and e-sports. Once again, they need GPUs, they need an inexpensive data centers. So, it makes a very interesting that we try to position the Company for opportunities for growth.
I’d like to highlight the September 30th. We generated income of $6.5 million with the gross mining margin of $1.9 million from mining in digital currencies. More details of that will be presented by our new CFO, Darcy, and so I like to hop onto the next slide. I quite often get asked the question, HIVE has gone down so much and it's like -- it's something the Company is not done good job. In fact, we have deployed the capital, we raised this a year ago, as we say we would and it's really become interesting for us is that HIVE has become a proxy for those are not going to trade Ethereum and Bitcoin on one of these digital platforms or digital exchanges.
With all the negative news in some of these exchanges, it appears that we become that proxy. So we correlate and as we show here in this visual, HIVE’s decline is predominantly 92% correlation with Ethereum abd Bitcoin is in the direction of the cryptocurrencies. We trade massive volume both up and down, and I think in the next visual is something that so hard to stomach for a lot of investors is this just the in DNA of volatility. That 10-day standard deviation for one year, if you look at the S&P, basically the daily and the 10 days or 1% is 70% of the time, gold is 2%, Bitcoin and Ethereum are pushing 22%.
I know on the daily volatility -- day-in-out Bitcoin Ethereum is a plus or minus 7% and 8% daily volatility versus the S&P is 1% of gold is on a daily basis is only 1%. That DNA of volatility is shown up in our stock price and 70% of the trading of stocks today are coin funds. So, it appears that we’ve become that proxy and we saw this week with a pop-up in Bitcoin that we surged 33% one-day. Yesterday, we were off a bit, but what’s really important to recognize is that, we are a proxy; we do move with these currencies, we are the go-to and the liquid name and next visual please.
So to some of the major headwinds influencing Bitcoin, and I think this is the first time I’ve ever seen a massive correction driven on sentiment. I know that a lot of these coin funds use sentiment indicators to move stocks and you see that’s very short-term noise, but its big volume. And so when we see that a peak in the Bitcoin prices is when the CME launch the Bitcoin features contract.
And in a gold markets that was always a concern because they see -- they call spoofing, manipulation of gold prices, suppression of gold prices by using the futures market, and spoofing is where you show that you’re a big seller but you’re really not, and you try to knock down prices that triggers stop losses and basically create a cascading down event. There's been no proof of this, even though many of the crypto world talks about it. There’s been no really, I’d say seen that the validate that, but in the gold space, yes. And in the silver space, there’s been a lot of litigation in the past decade, I’m showing games being played, using the futures market to move around gold prices.
So maybe that’s the issue. But we can see that peak is very, very easy and this visual. We also see that every time there is announcement that the SEC is going to be meeting with the Senates, SEC is going to be meeting with Congress. These events create a sell off. And we’ve seen from a year ago, this time last year was nothing but positive news, 5 to 1 positive to negative 1 is now reverse itself is 3 negative for every positive. And there are appears to be a sort of concerted effort with the G20 countries in the finance ministers around the world on synchronized concerns on the exchanges and pushing for regulations.
We did see a big surge in July of this year. And then all of sudden in the G20, finance ministers say, well, they’re not going to come up with guidance for regulations in the crypto space until October. And everything rolled over and we start seeing more declines, and just department begins investigations it seems to be ongoing. So, we’re witnessing a real decline in prices over negative sentiment concerns. And I think rightfully so a lot of these regulators have going after people that have been launching these ICOs that are not really digital currencies and they’re basically securities offerings. And they're cleaning up a lot of people that have abused the crypto space.
I think as positive and that decline has been exasperating. And with every negative, there is a positive and the positive is. There’s a huge increase in people coming in to mine these currencies. And that basically makes it more and more difficult because when you’re mining, Etherium or you're mining Bitcoin, it's the fixed number every day. So, if it’s a fixed number of points being mined every day and you have more and more people coming to grab a piece of those coins, therefore the difficulty goes up generating big profits. And that’s called the hash -- network hash rate.
And so what we’re seeing now is finally they’re leaving. People are flowing and capitulating especially with ASIC chips and eth miners, so I think that’s a positive part which Marco will talk about when he comes on here very shortly. So, the next visual, I like to introduce Darcy, who is experienced CFO in the Canadian Public listed companies. He is served as Director Accounting for Mercer International. He has award a CPA and a CA designation from Chartered Professional Accountants of British Columbia. He has which I like being based in the U.S. Sarbanes-Oxley experienced in accounting, which is another extreme level of processes.
And so, now I'd like to turn over to Darcy, to give us an update on the financials.
Thank you very much, Frank. Historically, we’ve had a 100% of our mining capacity committed to Ethereum and Ethereum Classic mining. As Frank has highlighted, the crypto space is being extremely volatile and over the course of this year, Ethereum has come under significant pressure. This resulted in our decision to take a write-down of our assets, which is the non-cash impairment that we recognized for the quarter for assets located in Iceland and Sweden. I want to stress on this that there’s no cash flowing out the door. This is strictly an accounting treatment and I’ll go into more detail in a couple of slides.
On Slide 11, we highlight what I consider to be a strong financial position. Our cash-on-hand at September 30, 2018 was $12.5 million and digital currencies were 11 point -- oh sorry, slide I apologize -- on Slide 9 we successfully added capacity to our mining network. We announced 200 Petahash cloud based ASIC mining, a deployment which delivered its first claims on October 1, 2018. We are now mining Bitcoin, but it did not show up in this quarter's results.
Subsequent to the quarter, we announced that we had negotiated improved financial terms for the Bitcoin mining contract. It's important to hear that this reduces our operating costs by approximately 30% and was retroactive to October 1st, and this greatly increases our profitability and our cash flow. Additionally, we have an option to extend the contract to two years from one, which provides us increased flexibility moving forward. Finally, we continue to accumulate coins even as we sold some in the quarter to fund operations.
Moving on to Slide 10. As of September 30, 2018, the Company was operating 24.2 megawatts of capacity. On the final day of the quarter, as I just mentioned, HIVE brought an additional 200 petahashes of cloud-based capacity online to diversify the business. The Company generated quarterly income of $6.5 million from mining of digital currencies and a gross mining margin of $1.9 million or 29%, which was negatively impacted by cryptocurrency pricing.
Operating and maintenance costs for the second quarter were $4.7 million consisting of fees paid to Genesis under the Master Services Agreement between HIVE and Genesis. This includes under the agreement, electricity, daily monitoring and maintenance, facility cost and all other costs directly related to the maintenance and operation of the Company’s mining equipment. Within this, it also includes a 93% guaranteed uptime for our money mining rigs that are operating.
I’d like to highlight the gross mining margin is a non-GAAP figure, which is calculated as the value of coins received at the time of mining, less the operating and maintenance costs paid to Genesis that I’ve just spoken about. I’d also point out that our general and administrative costs for the quarter were 718,000, which is less than half of the prior quarter, down significantly from 1.5 million, which reflects our attention to streamline our costs.
In the quarter, we had a number of large non-cash line items, which included reevaluation of digital currencies, a loss on the sale of digital currencies and impairments as has been discussed. These three things totaled $23.7 million with our depreciation, which was $5.1 million. Together, these two things are actually larger than our net loss, for the quarter was $28.3 million, which includes the negative impact of previously noted items.
It’s worth spending some time to discuss the impairment charge further. This isn’t something that happened every day. We wrote down the value of our GPUs in Iceland and Sweden as the replacement cost has diminished significantly, while the value of cryptocurrency has continued to decline. We believe that we’re showing industry leadership here and expect that other miners are likely to follow our lead, when they report next.
I point out this is not again a cash charge, but a change how to recognize the value of these assets on our balance sheet. There’s no cash flowing out the door related to this impairment charge. Overall, in the second quarter, we were held back by weak cryptocurrencies, but we continue to assess and streamline our cost base, which is reflected in our income and gross mining margin for average a megawatt.
On Slide 11, we highlight what I consider to be a strong financial position. Our cash on hand at September 30, 2018, was $12.5 million and digital currencies were $11.2 million, resulting in total current assets of $25.7 million with low cash burn. While price pressure is a headwind in the near-term, we remain bullish on the long-term value of cryptocurrency, and we believe the deploying the 200 Petahash of ASIC miners to diversify the business into Bitcoin is a prudent use of capital that reflects our aggressive capital deployment towards high ROI investments.
Turning to the next slide, these charts illustrate the impact the crypto prices have had on the value of our coin inventories. As of September 30, 2018, we held $11.2 million in inventory, the majority of which remains held as Ethereum. Let’s see on the next slide, when we get to it. Despite growing numbers of coins, the total value has declined. I’d also like to highlight and in the first six months of the fiscal year, we sold $3.5 million worth of coins, so we continue to sell inventory to cover our operating costs, while maintaining a healthy cash balance.
Looking in more detail at our coin production for the quarter, you’ll see from the chart that we have continued to grow our coin inventory since June 30th, adding 11,000 Ethereum and 4,000 Ethereum Classic net of sales. We remain bullish on the long-term value of cryptocurrencies, which is why we maintain exposure to this asset class by holding coin.
At this time, I'd like to turn the floor back over to Frank.
Thank you, Darcy. I just like to add for investors is as it's coming on as the Interim CEO and Olivier as the President, when we only look at the factors of volatility, I showed you earlier, the price volatility of the underlying Ethereum and Bitcoin pricing, but there's also another factor that's really important is the underlying volatility of buying these chips. The ASIC chips are fallen like 80% and the Ethereum chips are off about -- GPU chips for mining Ethereum are off 50%. So that's pretty volatile and that's a big part of the CapEx. And then you have this is lag, this lagging was called difficulty of hash rates. So that is also quite volatile.
So, we have three big things that impact our profit margin, which is most important for driving that volatility. And so what we did is we increased the discount rate for future cash flow. So when you take a cash flow model, you expect to earn at this price and you say, what’s the discount for that cash flow over the next four years because GPU chips are basically amortized over four years.
We accelerated that discount rate to basically understand and manage better the inherent volatility underlying this emerging industry. And that basically led to the rate down and so that some would characterize accelerating the depreciation, others would call it impairment is the operative word. But for us what's important is playing a very conservative view of this in this emerging industry.
Marco, are you on? Well, Marco, I know is in China, so sometimes it's hard to get that connection. But what I do for an update on the Board of Directors as the CEO and Co-Founder of Genesis Mining and Co-Founder of HIVE Blockchain with Olivier. So Genesis inception since 2013 has grown to the largest hashpower provider on the cloud. They have over 800 employees, Marco was under 30. He's a pioneer in cryptocurrency and blockchain industry, and he has over 2 million customers in 200 hundred countries using their services to mine cryptocurrency.
Having him come on the board for HIVE 2.0 is really an important step and in the renegotiations and what we've done with Genesis is so that being a good partner showing that good stewardship for the HIVE shareholders, and we'll highlight that also a bit more in 2.0.
Marco, are you on?
Yes, Marco is on the line.
Great, I'm so happy and I just want to comment about your industry leadership Marco, and it's a true digital company because Olivier is in Norway, Darcy is in Vancouver, you're in China and I'm in Texas, all communicating for the shareholders.
So the next visual I'd like for Marco to talk about the sort -- he's been through these massive corrections before, he's been able to weather them and come back and give some to the investors as sort of a confidence of what's taking place and the positive parts of both the network cash rate.
Yes. So, I think what we're seeing right now is actually an interesting opportunity and also a very interesting event that is happening in the mining space. We're seeing a significant correction on the difficulty, we had a minus 7.5% decrease in the last difficulty adjustment and we have another probably around minus 13% or even higher decrease coming as the next adjustment. That’s confirms the economics and the fundamental dynamics of mining that only the most efficient miners are in how can I say in an economically favorable position and that, of course that now we are reaching a profitability levels that for, I would say probably the majority are significant portion of the miners that occurs the operating are not suitable anymore.
So that consequently means that these miners are, having to drop out because they are not economical anymore that difficulty decreases. And therefore, the ones that remain in these markets and in these, under these conditions and can continue to operate. They increased their market share. Basically they increase their percentage, because they have remain in a lot of other miners drop out and therefore they get higher share and therefore get a higher reward. And that is particularly great, because that means that is why mining as an asset class is so interesting, because if you can make sure that you can maintain the highest efficiency.
Then do you basically have a buffer downside and you basically are protected in a way on the downside, which is compensated by that decrease in the difficulty. And regarding the market situation right now and looking in the past absolutely right. Because they frank like in the last five years operating for example, for Genesis Mining. We have seen so many of, a lot of these situations. And I think every single one has turned out to be the biggest opportunity for business growth and for market share increase. Because that is where, really is the strong players are dominating and can really show the strength, and the smaller, players they just have to drop out, whereas in our full market, just everyone wants to mine. And then profit margins are very high, but the key is to perform in tough, in the difficult market situation. And that is where we can create the most value for the Company.
And the next visual will Karlene is showing the falling hash rates are good for minors. And do you think they can fall much more Marco?
I think yes, definitely. I mean, we will see now where this is going? And it depends on, of course the prices. I would say as a fundamental rule usually you have the difficult, the difficulty follows the price. And of course that has to, that depends on the market situation all the time. For example, now the price went up and difficulty followed also the price upward. And then the price went down, but difficulty still went up. But that was only because the profit margins were so high for minus that this was valid. But in a normal equilibrium situation or in the -- when the market is in and how can I say into an equilibrium where miners are -- the profits are arbitrage out in a situation like that usually you have that fundamental dynamics that difficulty follows the price. And that's that is exactly what we're seeing, now prices going down difficulties following.
Thank you, Marco. Next slide please. So, we have 100 Petahash expansion for $6 million in stock. And I think that this is really important and it shows the relationship with Genesis as they accepted a significant higher price for the shares of Ethereum and for our shares in HIVE. So this is 100 Petahash at cloud base ASICs, which is going to cost $2.5 million in ethers and $3.5 in shares of HIVE at $0.55 for a total consideration of $6 million.
And I really want to thank Marco for and our team for putting this together, and particularly if you can comment on this is profitable at even with this meltdown in Bitcoin.
Frank, excuse me, its -- I had difficulty to understand, can you repeat if that was a question for me?
So, yes. So they -- when we’re looking at this 100 Petahash expansion even with this meltdown and using the cloud as our new strategy, it allows us to still maintain some modest profitability when we look at this type of a transaction.
That's right. Yes. So it's right to say the modest profitability. We should never -- we should still not forget though that we're shortly before ahead of a minus 13% decrease and the difficulty which increases our return by 13% afterwards. And we also don't know where the difficulty in the end will go or how much. I would say that we are in a in good economics of course. It really depends where the price will go from here. But my assumption that the good benefit that we have is that we are in the more efficient regime and that there is a lot of other miners that have to drop out first before we will get unprofitable.
Thank you. And as a big part for all investors, this is all about growth. And that's clearly what we are looking for the bottom here after an 80% decline historically, that's a bottom of our cycle and we're close to it. And there's so many people coming out, that are so negative more so than ever on Bitcoin. And I think that we're trying to look for HIVE 2.0 is all about growth. And we've been asked this question, now we're committing to growth at a much lesser price. So any surge back to $10,000 to Bitcoin and a transaction of this nature will be extremely beneficial for HIVE. And in even in these the dire circumstances this is still modestly profitable and giving back cash flow to HIVE. So I want to thank Marco for his sort of ingenuity and having the confidence and in going on the board and telling, we have to move forward and be positive.
I like to turn over to Karlene now, to talk about communication and marketing and branding.
Thanks, Frank. As one of the first publicly listed blockchain miners, we continue to focus much of our marketing efforts on sector awareness and blockchain and cryptocurrency education. The Company has created and maintained awareness in the space as well as created content which is educational and provided insight into a new high-growth industry demonstrated here on the slide by the publications we’ve been featured in. An abundance of resources are needed to help broader understanding and acceptance of the new industry with emerging revenue model. As such much, the Company’s media relations, branding and Investor Relation activities are oriented to provide this education.
I would like to thank investors for the ongoing support. And now I’ll turn it over to Olivier.
Olivier Roussy Newton
Thanks, Karlene. I want you to spend some time discussing the outlook for HIVE and specifically our HIVE 2.0 on a compelling and profitable use computing assets in Iceland in Sweden. And for partnerships [Audio Gap] the article, Artificial Intelligence or AI is really interesting and decentralized computing [Audio Gap] associated with distributed rendering services and computing scenarios we continue to [Audio Gap]. So while we are a miner now, we don’t expect to only be a miner in the future [Audio Gap] and assets to create some ways to de-risk [Audio Gap] and as these new services come online as what Ethereum [Audio Gap] create advantages [Audio Gap].
Olivier, you keep fading on this. Olivier, your voice keeps fading in and out. So, we’re on slide 20. We can talk about those parts.
Olivier Roussy Newton
Can you hear me now, all right?
Yes, I hear you now.
Olivier Roussy Newton
I hear you.
Olivier Roussy Newton
On Slide 20, we continue to make progress on a strategic plan to remain at the forefront [Audio Gap] the assets we owned.
So, Olivier, it’s Frank here, you’re fading, Olivier, you’re fading too much for the investors. I’ll try to summarize it for you. Okay, my friend? Okay. So we basically we’re trying to -- we’re continuing to make progress on a strategic plan to remain at the forefront of blockchain infrastructure industry and blockchain technology broadly. And we’ve been investing capital and we’re in a great position with our balance sheet, the assets of our own position as great as leaders in the blockchain infrastructure space.
And we continue to evaluate potential M&A, which present significant opportunities for accretive growth. We’re seeing a lot of really interesting opportunities here. For example in artificial intelligence AI, we think we're in a critical position to capitalize on these opportunities. We also look at Norway we're engaged with local parties to build a Norway asset and the HIVE team is very excited as we move from a capital deployment phase to what we're called calling HIVE 2.0, where we're part of the ever changing blockchain ecosystem which presents numerous opportunities as this revolutionary technology evolves and disrupts.
With that said, I like to thank investors for their ongoing support and I turn over to Q&A portion of our call and be pleased to take any questions. As a reminder, you may submit your questions through the webinar portal. We'll take a brief pause about five seconds and we'll compile the Q&A. Karlene?
Thanks. I think Darcy has some questions for you.
A - Darcy Daubaras
Sure, we’ve got some questions in here. We've got a question from David Kwan from PI. And he's asking. Can the Company provide an update on the CEO search?
Sure, the biggest part for this quarter has been hiring Darcy and on-boarding new people, what we're doing. So Darcy, it was a key part of being a full time CFO for us and that in along with getting dealing with these transition that took place in the Bitcoin and Etherium space, and we basically re-discussing and renegotiating our agreements with Genesis.
And I just want to say for investors realize that, from the original agreements for mining and the cloud, we have a 30% decline in the cost of that mining. Thanks to Marco and his team, found ways to save money and makes this marginally profitable even with this meltdown. And so, I think that that's quite important in that whole scheme. So, we've been busy doing those things and planning HIVE2.0
As for directly the specific the CEO search, it had the our committee, Marco knew, he has taken on that responsibility and so I think there he’ll full core press going into the year-end of interviews and looking at potentials CEOs.
Another question, another one actually from David, and I can probably take this one. He's asking. Are you planning on curtailing your spending to help conserve cash until hopefully crypto prices and economics improve?
So, first of all thank you David for these questions. You've seen our financials that we've already made significant strides to reduce our cost base. And we're continuously looking at ways of doing that. I will continue to see -- we believe strongly that cutting our quarterly spends as you have seen from Q1 to Q2 we cut it in half.
We've got right currently $12 million in cash on hand. So, I feel very strong that we're in a great place to ride out this unprecedented bear market and the uncertainties that there are and we all know in this cryptocurrency space.
And probably is one more question that's come through. Maybe Frank, you can answer this one because Olivier's line seems to be a bit bad this morning. Someone has asked if we can provide an update on Kolos?
Well, that’s a great question because Kolos is one of those opportunities that we deemed earlier this year, as being a huge opportunity for the search for inexpensive energy. And it was the potential for a gigawatt of energy. As I say, important as a potential and I think that Olivier is there right now. In Norway and apologize everyone for connection. But he is there making sure that what we’re doing, how we’re spending our money. And then also there’s been lots of negative rhetoric of Norway not wanting to give cheap electricity to miners, because there was a few bad guys over there. And there were mining and not paying bills or something of that nature.
And so he’s over there to resolve that, and we’ll have more information for it. But why we spent the money is because it’s very hard to get a gigawatt of energy potential. We look at the Pickering power plant in Toronto it's less than gigawatt. And what did it cost, in the billions of dollars. So this is a huge opportunity, because these data centers and artificial intelligence eSport gaming et cetera. It’s just not going away and it’s a massive growth industry. And they need inexpensive energy and they need our GPU chips or some other GPU chip. So we think that will continue to be a growth industry.
The last thing I’d like to come back to is a question or previous question that Darcy answered. One of the things is my experience in the natural resource investor and oil and gas, and I am right in the center in San Antonio basically with the frackers where lot of the ingenuity and innovation took place. And we did have people until the frackers came along. And one of the things I’ve noticed is that, they’ll hit 1,000 barrels a day and a year later to 100 maybe 200. But the decline rates are really massive. And so one of the things they do before, they don’t spend the money as they increase the discount rate of the net present value of future like cash flow, because the decline rates are volatile and the natural gas prices are volatile to take that risk of capital.
And I look at is very similar to this crypto space. And that is in the volatility the hash rates can be another factor of impacting. But you have to go and spend the money now when you’ve had these big declines. And we have I think the worst over and percentage wise posted the bottom on the price declines. But the -- as Marco talked about, that it looks like, we’re going to continue to see hash rate difficulties as people to officially get out of the business. And that will just start to expand our profit margin. And so it’s a much less risk of deploying capital today for this.
And so you have to continuously sprint, when you frac and you’re going to have 1,000 barrels a day coming back to fracing as a metaphor and it’s going to quickly fall to 800, 600, 400, you continuously had to be thrilling, to maintain the thousand barrels a day. And if you want to increase it, you have to deploy more. So that’s what I’m looking at this crypto space, and Marco has been very helpful and try to explain that to us, and that you just have to lean into it, now that there is this capacity that take place this is when you get the biggest huge upside.
So any bounce from here has significant opportunity as we drive down our costs at the same time to get position for a rebound. Thank you very much, ladies and gentlemen, for listening to us for Q&A and we’ve almost up in to an hour.
Any other questions?
No. I think that’s all we’ve got.
Marco, do you have any comments you’d like to make, if you’re still on the line.
Maybe on a final note, I also thank everyone for their participation and also for the question. I think it is now the time as said where the real competitiveness comes to play, and we are all I think working hard in order to -- we are all doing our best in order to perform in the best way in a market situation like that. And I think we have a good position going forward and I think expanding in a competitive environment like this where other companies have already dropped out or are dropping out is something that is really that is strong. So, we are following our path and I think we have an exciting time going forward.
Thank you everyone.
Thank you, Marco. Thank you, Darcy, Karlene and Olivier. That’ll be a wrap.