Champion Iron Limited (OTCQX:CIAFF) Q1 2023 Earnings Conference Call July 28, 2022 8:30 AM ET
Michael Marcotte - Senior Vice President, Corporate Development and Capital Markets
David Cataford - Chief Executive Officer
Michael O’Keeffe - Executive Chairman
Conference Call Participants
Craig Hutchison - TD Bank
Lucas Pipes - B. Riley Securities
Gordon Lawson - Paradigm Capital
Alex Jackson - RBC Capital
Brian MacArthur - Raymond James
Jacques Wortman - Laurentian Bank
Good morning, ladies and gentlemen and welcome to the Champion Iron Limited First Quarter Results of the Fiscal Year 2023 Conference Call. [Operator Instructions] This call is being recorded on July 28, 2022. I would now like to turn the conference over to Michael Marcotte, Senior Vice President, Corporate Development and Capital Markets. Please go ahead, sir.
Thank you, operator and thank you everybody for joining our call today, where we are going to be reviewing our Q1 fiscal 2023 results. Joining me in the room are David Cataford, our CEO and several other of our executives.
Before we get going, I’d like to highlight our disclosures statement on the webcast presentation, which is also available on our website at championiron.com under the Investor tab, Events and Presentation. And with regards to forward-looking statements and additional details thereof, I’d point you to our MD&A, which is also available on our website.
With that, I’m going to turn it to David Cataford, our CEO. And following the formal presentation, we are going to be turning it to a Q&A session for people. With that in hand, I’ll turn it to David.
Hi, everyone. Thanks for being on the call. Very happy to be able to go through the quarter results right now with you on this call. So if we look at the highlights for the quarter, I think the main highlight is really the fact that we are ramping up our Phase 2 project, the expansion that will allow us to double the amount of high-grade material that we are supplying to the market. Also hit an iron ore recovery of 80%. We will be able to go through why this has decreased from the previous quarters. Total cash cost of about $74 per ton. We will be able to run through this element, and be able to go through also the current cash position and undrawn debt. So you will see that the company is in a very healthy position to be able to continue our growth initiatives. If we turn to health and safety and environment, I’m happy to announce another quarter with no serious injuries and no major environmental issues at site. So we have very robust site procedures to make sure that we keep everybody safe and also make sure that we keep the environment safe as well.
Turning to sustainability, I am very proud to announce that we received the Mysteel Green Iron Ore Supplier award, so that the market is starting to recognize the fact that we’ve got one of the highest grade materials in the world, and that we allow our customers to decarbonize significantly. We have also worked quite significantly with our First Nations partners. Again, very proud to be the best employer of First Nations in the region and always continuing to strengthen that relationship with the community of Uashat mak Mani-utenam.
If we turn over to the iron ore market, you have probably seen the iron ore decrease by about 6% compared to the previous quarter, some short-term elements associated to China, and the lockdowns that we’ve been seeing in the country and also typically lower usage of steel in the region in this period, but we see this as a short-term element as the high-grade material continues to be in high demand. And we see that potentially increasing in the coming weeks and months. We have also seen the iron ore price bounce back in the recent days. So we see that as a positive sign that there might be restocking in the region to be able to buy back some high-grade iron ore. In the quarter, we also saw C3 freight index increased by about 32%. When we look at the current environment, we have seen that soften also. Main reasons for this increase, has been the increased seasonal shipments from Brazil, and also the higher fuel prices that we’ve seen. But again, we’ve seen these prices soften in the recent days and weeks.
Turning over to operations, while this has been a record production quarter, mainly due to the fact that the Phase 2 is ramping up. So, very proud to say that it’s ramping up ahead of our initial schedule. And as you can see, even if we’re bringing on more tons and the shiftability of the mine, we still hit our strip ratio. And so, the strip ratio on the head grade is in line with the mine plan, and the mine is in a very healthy position to be able to deliver our Phase 2 tons.
If we turn over to the financials, if we look at the EBITDA of about $95 million lower than the consensus. When you look at two of the major elements that account for this, one, there’s really a timing associated to one vessel that we had was supposed to be in the quarter. So typically, this quarter, we should have sold as many tons as we produced. What we had a vessel come in late, just last few days after the quarter. So that accounts for roughly about $15 million of that miss. And we also had some startup costs associated to Phase 2 that in the past could probably have been capitalized, but right now due to accounting principles we can’t. So that accounts for about $20 million. So, roughly over $35 million of that miss is associated to either timing issues or the ramp-up of Phase 2. But as the Phase 2 ramps up, you will see that our costs will be able to get back in line with the previous quarters.
If we look at the transitional cost increase, I think one important thing to highlight is really the fact that if you compare the previous quarter to this quarter, there was roughly about a $14 difference in terms of the cash cost. There is about $3 of that $14 that’s associated to inflation, and the rest is mainly impacted by the Phase 2 project. So we have got most of the fixed cost, most of the labor cost as well associated to our Phase 2, but we only have a fraction of the tons. As these tons start ramping up and we get Phase 2 to our nameplate capacity, you’ll see those costs be able to ramp back down closer to what we’ve seen in the previous quarters.
So again, I think it’s important to highlight that these are transitional costs, mainly associated to Phase 2 and there is roughly about a $3 of those $14, that’s really associated to inflation. We are still positioned very favorably when we look at the cash cost in the market, mainly due to the fact that we produce one of the highest quality materials in the world. This material has a significant premium compared to discounts from other producers, and our quality has always been stable, which is not necessarily the same in all jurisdictions around the world. So very proud to say that we’ve always reached our 66% material and we’re also on our journey to be able to produce higher grade iron ore to benefit from higher premiums in the future.
If we look at our provisional price adjustment, you could see that in the past quarter, we had an expected settled price of about $185. We settled at $167 because the price decreased during the quarter. That had an impact of roughly about $6.4 per ton. This is mainly due to the fact that the iron ore price softened during the quarter and we had booked at higher prices. When we look at the tons that are subject to provisional price in this quarter, we have roughly about 0.67 million tons that are on the water. And at the end of the quarter, we had booked a settlement of $138 per ton. We’ll be able to update the market at the next quarter when we get our final results. If we look at the average realized price, I think there’s been a slight disconnect between the P65 index and our material.
First thing I want to say is to reassure everyone, we’re not getting any discounts for our material. We’ve hit the sellable quality, the high-grade quality of 66%, fully benefiting from that premium, the timing element in the quarter really explains the lower gross realized price. This is mainly due to the fact that if you look at the end of the quarter, as we just mentioned, there’s just short of 700,000 tons on the water that we had to book at $138 per ton, which is lower than the P65 index of the quarter. So that impacted our realized price in this quarter. But if you average it out for a year’s time, what’s important to note is that we fully get the P65 index, and we’ll continue to get the P65 index and a little bit above until we get our 69% material, and then we’ll be getting a significant premium over that P65 index.
If we look at the cash change during the quarter, so we finished the quarter at roughly about $190 million in the bank, one of the elements to highlight here the change in working capital, we paid significant amounts of taxes in the quarter. This is mainly due to the fact that we have to pay our tax installments associated the last year’s results. As you can see, the results have softened compared to last year. So we have a receivable of roughly about $65 million from the various government entities at the moment in terms of tax payments. So this is really a timing issue on that cash portion. Another larger ticket in the change in working capital is that with the bringing of our Phase 2 in line, there’s some prepayments that we had to do with our rail supplier that are also included in this working capital.
These are not recurring elements. It’s really a timing element associated to our Phase 2. When we look to the PP&E and advanced payments, so in this bucket here, you see roughly about $28 million associated to deposits, $14 million to our partner for the mining equipment and $14 million for our port equipment – or not port equipment, sorry, but the port logistics group. So if you combine this also with the capitalized interest that we can do on our debt during the construction period, there’s over $33 million of that element that’s associated deposits and interest. So if you also remove the amount that was invested in Phase 2, we are roughly in line with the typical sustaining that we’ve had in the past during the early summer months.
So when you look at the change in working capital, the dividend that was paid recently, and the sustaining and investment CapEx, that accounts for the change in cash that we have right now. When you look at our balance sheet, we’re still very well positioned for growth, close to $200 million of cash and also close to $400 million of undrawn facilities. So, very well positioned to be able to continue our growth project and again, very proud to have self-funded the Phase 2 project out of all of our cash flow. In terms of significant milestones, I think the Phase 2 is the biggest highlight of the quarter. We’re ramping up ahead of schedule, as we’ll see in the next slide. But I think an important note that even in the challenges that we’re seeing in the market right now, able to deliver the project and now ramping up as our expected schedule.
If you look at the scheduled cumulative production that we had, we base our numbers on the curve, the McNulty curve. And this curve here is sort of a theoretical curve that looks at most of the projects around the world and sees what is the best ramp up schedules in the market? And you can see that our actual cumulative production is over this most aggressive curve. So very proud of what the team has been able to achieve in delivering an advanced ramp-up on the Phase 2. And important things to highlight is the fact that we’ve achieved over nameplate capacity on a 24-hour basis and close to 90% of the capacity on a 7-day basis. So we know that the plant and the design works, we know that the plant can handle the tons and that we will be able to meet our namely capacity. Now it’s just fixing all the various bugs associated to Phase 2 to be able to reach our nameplate capacity.
If we take a little step back and we look at the longer-term and the medium-term view, we still see the same advantages as we have in the past in terms of green steel supply chain solutions associated to our material. We’ve actually even seen this accelerate as we see various jurisdictions around the world, continue to sanction Electric Arc Furnaces and continue to work on their transition to lower by about 40% of their CO2 emissions by 2030. Again, reminding the market that the only way to achieve this today is to buy higher grade type iron ore. And right now, when we look at the direct reduction grade material, we don’t see anything or any projects being sanctioned of scale around the world. So that really puts us in a niche area where there is significant demand increase and no supply increase announced.
In terms of catalysts, when we look at the various growth initiatives that we have, we’re finalizing our feasibility study for the flotation plant to allow us to produce 69% DR grade material. So this is advancing well according to plan, and we will be able to come to market shortly with this feasibility study. On the Kami project, also advancing the feasibility study, just to remind everyone, Kami, we’re targeting directly to produce 69 or DR-grade type material with the Kami project, and working to be able to deliver this feasibility study in the first half calendar year 2023. And we’re also advancing our pellet plant feasibility study with our partner. We view this as a significant value accretion for our company to be able to deliver in the future of this pelletizing facility as the demand for DR-grade pellets continues to increase. And we see that this is the required material to produce DRI and essentially produce deal out of the lower CO2 intensity Electric Arc Furnaces.
In terms of the green steel transition, we could see that this is accelerating, announced and under construction EAF capacities around the world. We could see that there is about 45 million tons per year of additional DR feed quality iron ore that’s going to be required to be able to meet what’s been announced and under construction today. This is not even forecasting what will have to be done by 2030 for the different groups to achieve their CO2 emissions. This is just what has been announced today are in construction today. And just to put this in perspective, 45 million tons of increased DR quality feed iron ore. That more than doubles the merchant market in terms of DRI and DR feed quality material today. So you can see that there is significant increase in demand in the next coming years, which we view will increase the premium for this type of material.
On closing note, I’d like to thank all of our staff and all of our partners for allowing us to have such an incredible ramp-up for our Phase 2 project, again, highlighting the fact that we had a quarter with some transitional costs associated to the ramp-up of Phase 2, but we still feel that the – that our project is very well positioned to compete on the cost curve around the market. And we do feel that the demand for the hard rate type material is going to fetch a significant premium in the future as well. So, very well positioned to continue delivering great results for our shareholders.
So, thanks everyone and we will now turn it over to questions.
Thank you. [Operator Instructions] Your first question comes from Craig Hutchison of TD Bank. Please go ahead.
Hi, good morning, guys. Thanks for taking my call. Just my first question with regards to capital for Phase 2, it came out a fair bit higher than what I was anticipating, just based on the expenditures to the end of March. Can you talk about what kind of drove that and whether we can expect additional CapEx related to the completion of Phase 2 here in the current quarter? Thanks.
Yes. Thanks for the question, Craig. So when we look at our Phase 2 project, we’re pretty much – we delivered the project at the end of April, investing most of the CapEx to be able to finalize this. What we’re doing now is just – or what we did in July was just finished commissioning the recovery circuit. So we still had to add the magnetic separation and the reflux classifiers, which has now been done. In terms of CapEx, you can see that we’ve pretty much spent everything to be able to get the Phase 2 up and running. There is still some cost – for the start-up costs to make sure that we can reach our nameplate capacity but most of the CapEx has been spent associated to the actual Phase 2 construction. And just to remind maybe everyone, the capital intensity for our Phase 2 tons is still sub to $70 per ton and we compare this to the market with other projects that are being done closer to $200 per ton. So you could see that for our shareholders, this has been incredible value accretion and incredible opportunity to get that Phase 2 up and running.
Are you able to give us sort of an order of magnitude in terms of what that number is this quarter in terms of Phase 2 remaining? Is it $10 million? Is it $20 million? And then maybe just as a follow-up question. Are you able to provide a sense of what the sustaining CapEx is sort of for the balance of the year on a kind of quarterly run rate?
Yes. Thanks for the question, Craig. As you know, we don’t give guidance, and we never have. But realistically, what we see is that most of the cost has been spent already on the construction of Phase 2. The summer months are typically the months where we have a bit of a higher sustaining CapEx associated to [indiscernible] and everything that we do in the tailings area and also on the mining side because these are easier months to do those investments. But as typical years, you’ll see the sustaining CapEx to be significantly lower during the winter months.
Okay. And just maybe last question for me. Just in terms of the ramp-up of Phase 2, can you provide any kind of color on how that’s going where you are relative to design?
Yes. So if we look at – currently, we’re roughly in the order of magnitude of about 50% to 60% of our nameplate capacity and working to be able to increase that to our full nameplate capacity. But I think the important highlight during the quarter is the fact that we’ve demonstrated that the plant can actually reach all these numbers. So all the equipment, the mill, the conveyors, the filter plant, the recovery circuit, they have all demonstrated that we can hit over nameplate capacity. So we feel confident that the plant will be able to reach that nameplate in the short-term.
Alright. Thanks, guys.
Thank you. The next question comes from Lucas Pipes of B. Riley Securities. Please go ahead. Mr. Pipes, your line is open.
I think you are on mute Lucas.
Sorry about that. Good morning. I appreciate the opportunity. My question is also on Phase 2 and congratulations on what you have achieved there to date. I wanted to ask about the timing to reach full nameplate capacity. Is it 3 months? Is it 4 months from now? And then in terms of the bugs that you’re still working out, can you point us to what kind of is maybe giving you the most hikes today or is it relatively small potatoes? So thank you very much.
Yes. Thanks for the question, Lucas. So when we look at what we had initially sort of set in our feasibility study, we expect nameplate capacity before the end of this calendar year. But we will do everything we can to beat that target. So when we look at the remaining elements to be able to deliver the project. So when the Phase 2 is running, it’s running at nameplate capacity. So what we need to make sure now is that we increase the reliability of the plant. This is sort of typical with newer equipment, so we are just fixing the smaller bugs. I won’t call it small potatoes because it does represent significant cash for our shareholders, but we manage that in a very diligent way and very proud in the way that the ramp up is being handled right now. But I don’t see any major flaws or any significant technical elements associated to reaching nameplate capacity. It’s really more debugging all the smaller elements and making sure that we get that reliability up there.
That’s very helpful. Thank you. Then my second question is on costs more broadly. You mentioned in the recent quarter here, a lot of the costs were due to the completion of Phase 2 and the fixed cost there, but the actual inflationary component relatively small, from here have the global inflationary pressures flowing through? Or would you expect additional headwinds in the coming quarters? And if so, could you quantify those? And then some of your peers have talked about severe labor shortages impacting production as well. Is that a headwind or challenge as you look to fully ramp Phase 2? Thank you very much.
Yes. Maybe that’s because we’ve been hiring those people. But realistically, we’ve obviously got labor challenges, but I feel very confident that, that’s not going to affect our production. So we’ve got a great labor force, people that are extremely engaged. Again, we had the head of the union of Quebec to visit our project in on this Monday, and he called just to say how the morale was good, how the people were happy, so not typical from a – message from a union representative. But I do feel that we’ve got a fantastic workforce that wants this to work well. So, on the labor side, I don’t necessarily see any major issues at our site. When you look at the inflationary pressure, while most of that in this quarter was associated to explosives and fuel prices, which have not seen necessarily increase compared to compared to what we’ve seen in the past quarter. I don’t have the crystal ball, so I’m not sure where that will finish during the quarter. We’re not hedged for either fuel or explosives, so we’re subject to the market prices, but I haven’t seen that increase as of late. So we don’t give any guidance, but realistically, I think the cost, if fuel and explosives stay the same, should be pretty much in line on the inflationary portion. There is always the spare parts as well, but again, this is not a quarter that has a large shutdown like the past quarter. So that shouldn’t affect us during this quarter either.
That’s very helpful. I really appreciate all the color. Best of luck and I will turn it over.
Thank you. The next question comes from Gordon Lawson of Paradigm Capital. Please go ahead.
Hey, good morning, everyone. Could you elaborate on the realized premium over the 62% base product? I think many of us were expecting that to be higher given the current demand situation around ESG concerns and such. So was this a one-off quarter? Are you expecting that to improve greatly for the current quarter?
Yes. Thanks for the question, Gordon. So, when we look at the market right now, I mean there has been a softening price on metallurgical coal, there has also been some production issues in China. So, a lot of blast furnaces either idled or running at minimal capacity. When that happens typically, they chase more lower grade materials just to keep the lights on, but we don’t see that as a long-term trend. This is more a short-term event that has put some pressure on the premium for the high grade. But we do expect because there is no new supply of this material that this would get resolved and we do feel that the premium for high-grade material especially eventually DR-grade material is going to be very healthy in the future.
Yes, okay. That makes perfect sense. And I get that you don’t like giving guidance, but once Phase 2 is fully ramped up and looking at your historical cash costs here, would you say that $55 to $60 range is a fair assumption even after adjusting for biannual maintenance and such?
Yes. I will tell you, Gordon, we are going to do everything we can to keep those costs in line and to lower them as much as possible. I think what’s important to note is that this material is an extremely high demand. And even today, because of the premiums we get and the discounts that others get, we are positioned very well on the cost curve. It’s difficult to answer your question until Phase 2 is finalized and we are able to demonstrate some results, but we will be more than happy to update you as soon as we have those results.
Okay, great. Thanks very much.
Thank you. Your next question comes from Alex Jackson of RBC Capital. Please go ahead.
Yes. Hey guys. Thanks for taking my question. Just another one on Phase 2, I am wondering if there are any key milestones you might be able to outline during the ramp-up that we should look for, or look for updates for, over the next couple of months? Thanks.
Yes. Thanks for the question, Alex. I think the next milestone for us is to reach commercial production. So, right now, we are dedicated to be able to reach that and working to be able to finalize this. But apart from that, there is no major milestones I think except for us hitting our commercial production and nameplate capacity here.
Understood. And then just on the growth projects, I am curious, have you guys sort of – has there been work started on the feasibility study around Pointe-Noire or is the team really just focused on the DR feed behind the Phase 2 ramp-up and that’s kind of coming a little later?
Yes, we have got a separate dedicated team that’s working on the pelletizing project for us. This creates a whole lot of value for our company. I mean DR pellets even if you have seen the premium for the 65% index softened, you can see that the price for the DR pellets is still very healthy. And we really see that as the future value accretion for our shareholders. So, we are definitely working on delivering that feasibility study, and it’s not on the shelf. It’s being worked on with a dedicated team right now, and again, in partnership with a major steel producer. So, we have got a great team that’s working on this.
Understood. Thanks guys. That’s all for me.
[Operator Instructions] Your next question comes from Brian MacArthur, Raymond James. Please go ahead.
Good morning and thanks for taking my question. Given the world appears to be going as you think it is more EAF furnaces, therefore, potentially a lot of demand for higher-grade products. When you did the feasibility study for the feed product was 69%, it’s sort of like half – it’s a half the Bloom Lake. Is there any reason why given it’s getting better, you can’t go to 100%? Are there technical constraints? Is it a capital constraint, or is it just the mix of contracts you have right now that sets the 50% limit, or is it just trying to sequence all the other projects you have as well going forward? If you could just walk through the timing and strategic thinking on that going forward, whether that’s changed at all given how the market is developing?
Yes. Thanks for the question, Brian. So, when we look at the technical capability of Bloom Lake, there is nothing that’s stopping us from being able to produce 100% of this DR-grade type material. And that’s our longer term strategy because we do feel that this is how we are going to differentiate ourselves in the future. So, even if there is new project that come along in the next 5 years to 10 years, on the 64%, 65% mark. Well, for us being at 69% really is going to separate us from all the others and allow us to maximize the profitability and also maximize the value for our shareholders. But realistically, what we want to do is to sequence that properly. And I think as you mentioned, the main steps for us is to get the first plant up and running, then get the DR pellets to make sure that we can fully benefit from that premium and then being able to factor in the 100% portion of Bloom Lake and DR. But we first want to do that 8 million ton per year plant, then the pelletizing facility, and then we could sequence the second plant potentially.
Great. Thank you very much. Very helpful.
Thank you. The next question comes from Jacques Wortman of Laurentian Bank. Please go ahead.
Hi. Good morning guys. My understanding, and maybe I got this wrong, was that the Kami feasibility study was going to be completed in the second half of this calendar year. And it looks like it’s now maybe slipped into the first half of next year. Assuming I don’t have that wrong, can you just give a bit of color as to why that’s moved? Thanks.
Yes, you have that correct, Jacques. So, we pushed it out a little bit. Do you guys hear me? So, we pushed out a little bit to make sure that we can fully get the DR grade material out of the Kami Project. So, there was some test work that was required to do. If you look at the original Kami Project, it was to produce 65%, and we wanted to make sure to be able to demonstrate the 69% with the Kami material. The availability of labs really made us have to push this a little bit out, not a significant move, but we wanted to make sure to get those full results, and come back to the market with the proper feasibility study and not have something that still had sort of holes in it. So, that’s why we have pushed it out slightly to next year.
Are we ready for the next question?
I hope that answers your question, Jacques?
Yes, it does. Thank you.
Your next question comes from Lucas Pipes of B. Riley Securities. Please go ahead.
Hi. Good morning again. Thanks for taking my follow-up. I wanted to follow-up on the macro side. You spoke with confidence about it being more temporary softness in China. I wondered if you could elaborate on that. And then there have been reports of a Chinese buyers consortium for the iron ore market. How if at all, would it impact Champion? Thank you very much.
Yes. Thanks for the question. So, for us, when we look at the future with China building over 55 electric arc furnaces now, yes, there is going to be scrap available. But realistically, if they want to produce the high-grade steel out of those facilities, they are going to need the pure metallics to make sure that they can actually hit the quality and the products that they want. So, for us, even if there is a new buying consortium, I think this is not going to change the sort of premium that we are getting for the high-grade material and not the demand that we are getting for the higher grade type material. I think the main factor for us is really the fact that there is no new supply that’s coming in that DR grade market that will really set us apart in the future. So, we obviously don’t have a crystal ball. It’s tough to factor what’s going to happen in China. But right now, as we eventually see those lockdowns being softened, we do expect that there is going to be more production and more usage of steel, and that’s going to favor potentially the high-grade material line.
Appreciate the color again. Best of luck. Thank you.
[Operator Instructions] There are no further questions at this time. Please go ahead.
Thank you, operator. And I believe at this point, we are going to turn it over to our Executive Chairman, Michael O’Keeffe, for closing remarks.
Okay. Thank you, Michael and David, for the presentation. Look, it’s been a tough quarter, and everyone is focusing on cost. But when you reflect back, I am such a privileged Chairman to have a team like we have. And what I am referring to is the fact that I have been looking around the world I haven’t seen any $1 billion project or $1.5 billion project coming on, on-time and on-budget during the period of COVID. And we have managed to do that. And that means people like Alex Belleau going up to site, sitting with the people, managing the contractors through this whole process. We have had 2,000 people at site doing this project. It’s – you have to pinch yourself. So, what everyone is looking at today is that we have come through this. We have never had to raise equity through the process. We are sitting with good cash and debt undrawn, again, an amazing feat from a company of our size. I haven’t seen that happen anywhere in the world today in mining assets.
When you think about where we are, we have got – obviously, the costs are high, but we are running ramping up our production. So, obviously they are going to be high. We, like everyone else, having to pay higher cost of fuel and for exposures. That’s common through the world now given also the issues that’s happening in Russia, with Ukraine, all of that is causing a worldwide problem, and the issue of COVID in China. Now, hopefully, things will start settling out and our costs will start coming down as our production ramps up. And everyone, I think in six months’ time will be saying, “Okay, where did all that come from?” So, what we are focused on and what David’s discussed is high-grade and also getting closer and closer to DR feed type material and also not being as reliant on China as everyone else is. So, the strategy is there. We have the right team. We have the right product. And our balance sheet is in good order.
So, look, thank you all for your support. And may this continue for us in the sense of how well and efficient we operate. Thank you all again for coming on the call, and have a great day. Thank you very much.
Thank you. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.