Altri, SGPS, S.A. (MO) Q3 FY2025 Earnings Call Transcript & Summary

Good morning. We welcome you to the Altri Third Quarter 2025 Results Conference Call. [Operator Instructions] I'll now hand the conference over to Mr. Rui Cesario, Head of IR of the Altri Group. Please go ahead, sir.

Good morning. Thank you for joining Altri's Third Quarter '25 Results Conference Call. We will review our financial performance, market conditions, operation highlights and outlook, followed by Q&A at the end. We have with us the CEO of Altri, Mr. Jose Pina; and Mr. Miguel Silva, the group's CFO, to address these topics. I will hand over to Mr. Jose Pina.

Thank you, Rui. Good morning, and thank you for attending Altri's conference call. As always, we're pleased to host this call with investors and analysts to share Altri's results and our views about the market environment and challenges. If you turn to Slide #2. We start with the main highlights of the third quarter of 2025. In the pulp market, global hardwood pulp demand picked up in recent months. However, China's additional capacity and increased access to domestic raw material have limited recovery in prices. Demand for dissolving pulps and Asian textile chain has stabilized in the third quarter after a more challenging first half of the year as a result of U.S. tariffs announcement and lower activity in the sector from some Asian countries. EBITDA reached EUR 11.6 million, a 79% decrease year-on-year with a margin of 7.1%. This is mainly the result of lower pulp prices, which have amplified -- was amplified by the devaluation of the U.S. dollar. Nonetheless, and despite the difficult environment, our cash cost continues to decline compared to previous periods. On diversification and growth at Biotek, the migration of BHKP production to dissolving pulp remains on track for completion by the end of 2026. The acetic acid and furfural project at Caima is progressing. And we've completed in the third quarter of 2025, the acquisition of a majority stake in AeoniQ, a Swiss company focused on sustainable textile fibers. Moving to Slide #3 and looking at market highlights. We have seen some acceleration in global pulp demand over the summer months. Many industry players became more aware of the tariffs effect and the impact in their financials. China and Asia are the main drivers, while Europe and North America have slowed after a strong 2024. Hardwood pulp demand grew by 8.8% year-on-year with China showing a 13.4% increase and the rest of Asia/Africa up 18.1%. Fiber to fiber substitution continues more obviously every year. The challenges faced by softwood producers are even higher than hardwoods with main clients adapting their products to higher hardwood use anticipating challenges or in this case, continued challenges on softwood. In Slide #4, dissolving pulp demand was affected by U.S. tariffs impacting the Asian textile value chain, but we have been seeing recovery in the past months. Overall, global dissolving pulp demand declined slightly by 1% to August, which compares with minus 4% by June of this year and minus 8% in the first quarter as well of this year. Turning to Slide #5. Inventories at European ports have been stable since the second half of 2024, in line with the historic average of 1.4 million to 1.5 million with a slightly lower trend. In Slide #6, we comment on the evolution of the U.S. dollar versus the euro during 2025, which has amplified an already material increase in pulp prices. Average BHKP pulp prices in Europe fell by 25% in U.S. dollars and 30% in euros compared to the third quarter of 2024. When comparing with the previous quarter, we also saw a reduction in prices by 12% in U.S. dollars or the equivalent of minus 15% in euros. The PIX price index ending September was at EUR 1,000 per ton and currently stands at $1,080 per ton. In Slide #7, we see dissolving pulp prices down by 15% in the third quarter of 2025 versus last year's third quarter. Despite a historically stable and lower volatile trend versus BHKP, dissolving pulp prices have been affected by the U.S. tariffs announcements with material consequences to the global textile value chain. Nonetheless, prices have stabilized during the third quarter of 2025, and we have started to see a pickup in demand from end clients. In Slide #8, we show an evolution of volumes broadly in line to slightly negative in the first 9 months of 2025, given the challenging demand environment, especially in Europe. Moving on to Slide #9. Volumes sold per region are focused in Europe with an increasing trend from the Middle East, namely Turkey and Asia. On end users, volumes sold continue to be led by tissue with textile, P&W increasing its weight. I will now pass to Miguel Silva, Altri's CFO, to comment on the main financial highlights of the quarter. Thank you.

Thank you, Jose. In Slide #10, lower pulp prices and the weaker U.S. dollar has put pressure on revenues and profitability throughout 2025. Total revenues for the quarter were EUR 165 million, down 20% year-on-year, and EBITDA was around EUR 12 million, down 79%. When comparing to the second quarter of '25, although revenues have decreased by a small amount, this was achieved with 9% higher volumes, which were more than offset by lower prices and the weaker U.S. dollar, leading to lower margin in the quarter. Going to Slide 11. On an accumulated basis, revenues and EBITDA have registered a decrease in the 9 months as the pulp market environment was less favorable than last year. Going to Slide #11, we can see that EBITDA margin continues under pressure, standing at 7.1% for the quarter and 12.9% for the first 9 months. We expect margins to recover in a more normalized environment. In Slide 13, EBIT and net profit have continued their downward trend in the third quarter, mainly due to the already mentioned challenging pricing environment and currency effects. We move directly to Slide 15 and regarding costs, in spite of the challenging market environment, we have been able to reduce the cash cost in the quarter by 3% quarter-on-quarter and minus 8% year-on-year, putting the 9 months '25 number down by 2% when compared with the 9 months of 2024. We continue to focus our efforts in optimizing costs with the goal to achieve a cash cost reduction for the full year of 2025. On the wood side, prices have been fairly stable during 2025 when compared with 2024, but with a better mix. During 2025, we are having less imports of wood from outside Iberia, the more costly source. On the energy front, the situation has normalized since the reactivation of the cogeneration turbine at Celbi on late March 2025, improving production and efficiency levels. Chemical costs are mostly trending down and are in line with last year. On Slide 16, we can see net debt increased during the quarter, mainly due to additional CapEx and corporate tax advanced payments, which are based on last year's profitability and will be adjusted as the final numbers are calculated. I will now pass back to Jose.

Thank you, Miguel. If you turn to Slide #17. Despite the challenging environment, Altri maintains a high single-digit return on capital employed at 8% for the first 9 months of 2025. Turning to Slide #18. We have some ESG and sustainability highlights during the quarter. Altri earned the EcoVadis Platinum Medal for the third consecutive year, ranking in the top 1% of companies globally in our sector. The group was ranked third worldwide in our industry among the 500 most sustainable companies according to TIME and Statista. We celebrated the Sustainability Day, making an event that -- or hold an event that gathers several business partners and suppliers to talk about reducing impact and creating innovative solutions towards net zero. Altri also held a second health and safety convention, reinforcing our commitment to prevention and safe behaviors. Turning to Slide #19. And in order of expected completion of new projects, we started by sharing the main numbers, main figures of the acetic acid and furfural production unit at Caima that should start operation in the first half of 2026. We already shared these numbers in previous quarters, but wanted to underline that the commercial development is already underway. In Slide #20 at Biotek, the conversion from BHKP to dissolving pulp is on track for completion by the end of 2026. Some of the highlights include the price premium for DP over BHKP average 41% between 2019 and 2024. Production capacity will exceed 180,000 tons once the full conversion is complete with potential to reach longer term 200,000 tons. Main target for this project is obviously Asia with a focus on textiles and specialties. On Slide #21, we share some numbers of the project to be developed by the recently acquired AeoniQ. Capacity will be 1,700 tons per year with revenues of EUR 20 million to EUR 25 million expected from 2028. Project targets global markets and a range of end users, including apparel, home textiles and footwear. CapEx for the industrial unit at Caima is EUR 60 million net of subsidies. In Slide #22, we repeat some highlights on the Gama project, and we're happy to discuss an update of the situation in the Q&A session. Finally, on Slide #23, we share some of our conclusions and perspectives. In the pulp market, global demand recovery was disrupted early in 2025 by U.S. tariffs and economic uncertainty, but demand is now seems to be recovering led by Asia and China. We see early signs of price improvement and remain moderately optimistic for the coming quarters. Operationally, we continue to focus on cost optimization with another favorable evolution in variable costs during Q3. We expect a second consecutive year of cash cost reduction. On strategic diversification, Biotek migration to dissolving pulp is on track. Caima's acetic acid and furfural project will enable new high-value products and AeoniQ project is advancing sustainable textile fiber development. As a conclusion, 2025 being a challenging year for the sector given the economic doubts caused by tariffs announcement and the evolution of the U.S. dollars, we expect to see a normalization of the situation in the coming quarters with the 2026 less volatile with a more balanced supply and demand, making it possible to have progressively higher returns. Thank you for your attention. We look forward to your questions.

[Operator Instructions] Our first question comes from Bruno Bessa from CaixaBank BPI.

Yes. My first question will be on the -- related with the pulp industry balance. So we have been reading from several industry sources that apparently, the industry needs permanent capacity shutdowns or conversions in order for prices to recover more materially. My question here is, how do you see this being played? So do you expect more conversions of capacity like the one you are doing at Biotek and the one already announced by Bracell? Or do you think that there will be effectively capacity shutdowns? And if we see capacity shutdowns, where do you think those shutdowns are most likely to happen? So this will be the first question, a bit of an overall view on the industry momentum. The second question on the cash cost evolution. So you have a very aggressive reduction of cash cost throughout the year and particularly in Q3, you made a very strong delivery on this front. If you could give a bit more color on the drivers behind this evolution? And what should we expect going forward in terms of net of cash cost for next year? And where is further room for improvements in the short term? So this will be the second question. And the third question, well, as you mentioned, an update on the Gama project.

Thank you, Bruno. Okay. So let's start with the first question regarding the pulp industry balance. I think from what -- everything that we've seen at least the supply-demand balance has clearly been somewhat long on the supply side. I think most of what has come to market recently is now fully operational. So the question becomes if there's not going to be significant capacity additions, at least, I think, implications, particularly for the European market, although this relates to global supply-demand balance, but in the foreseeable future, I think we're talking primarily if there's any capacity additions will likely be in Asia, although there is some questions around the viability of some of the projects that have been announced. As you're probably aware, particularly in China, integrated capacity and the multiple projects that have been announced, a lot of those are dependent on domestic wood, which has been under upside pressure. I think just over the summer, we've seen roughly a 30% increase in domestic fiber prices. And effectively, the marginal cost of a lot of these, specifically also the new operators, even with domestic supply of fiber, it will be somewhere in the range of where prices are now. So clearly, the recent price development is justified truly from significant pressure in terms of the financials of those units. But what we see actually looking forward is likely going to be some continued potential upside risk in terms of implications that may have on prices. But if I look at current cash cost curves globally for the industry, there's still a number of units which ultimately could be under significant pressure. I'm sure there's going to be a review of a lot of those and the outcomes will be some sort of slowdown in terms of output, potential some conversions, although it's not clear into what type or what integration that could take or eventual straight shutdowns. And I think North America still has some, although not significant, but some capacity and high cost capacity. Latin America, despite what everything everyone says, there are several units and some of the major players or at least the major player, which ultimately are still quite inefficient and something will ultimately need to happen there. We've seen the move by Bracell specifically to dedicate a full line to DP, primarily for internal captive users given that they're expanding their finished fiber capacity. So most of the -- or essentially the volume that the -- additional volume we supply will likely go into their new units but this represents 600,000 tons. On the European side, the conversion we're undergoing with Biotek, where Biotek hasn't been, if you think of paper pulp 250,000 ton units that will be -- it's already underway with significant swing campaigns that's over 2026, in particular, will be swinging completely by the end of the year into dissolving. So that's another significant reduction. So I think the combination of all of this is clearly going to tighten the market through next year. And we believe that there will be a reflection in terms of, as I said, some upside risk concerning the actual price level. And in fact, the analysts, when they look at -- when they make a forecast for pricing levels for next year, I think you see in the future curve that clearly that will be on the upside. Regarding the question on cash cost outlook, we continue as we have been on a trend towards optimizing our cash costs. I think if you look at it in the context of this year, we -- I think we said earlier this year that our target is going to be in the low single digits. I think actually, we're probably going to be a bit closer, especially looking at the Q4 towards middle digits. But for the year, we remain pretty much confident of achieving the indication we've given. And the main drivers here is clearly a more optimized wood sourcing portfolio. So we've seen some reductions in our fiber costs, there's also lower chemical costs and more efficiency from operations. And a last but still significant point is we have very stable fixed costs that, again, we continue to optimize. So I think all those -- all 3 have combined to ensure that we were delivering lower cash costs and that's continuing. Regarding your last question on Gama, we're currently under environmental permitting. So the next step or the step currently underway is on the integrated environmental license, which is responsibility of the regional -- the autonomic administration. So we continue to follow that closely. In the meantime, we have been exploring also some of the financial opportunities. We were happy to register that through one of the applications we've done through the European Innovation Fund and having surpassed all the thresholds for funding, unfortunately, did not receive an allocation because of the limited funds available for all the projects. It's a highly competitive process. It's a highly demanding assessment process by an external panel of experts of the union, very experienced experts that review a number of projects. And in the end, they decided also to assign an [indiscernible] the project specifically validates its merits and clarifies that the project is fully in line with the strategic industrial priorities of the European Union, which should, in principle, also support access or give it -- in terms of access to other financial support and incentive instruments. So that's basically where that is. I think the next step is clearly this one. In the meantime, we also have been looking at options regarding the electrical grid connectivity. And over the next few months, hopefully, we'll have some further news on that front. Thank you, Bruno.

The next question comes from Luis Colaco from JB Capital.

Most of my questions have been answered. But probably a more generic one regarding the London Pulp Week. If you could provide us some feedback on the event and if you left the event feeling more positive or less positive versus when you arrived?

Thank you. I think overall, I mean, the expectations, I have to say, were not extremely high for the events, given where the industry has been this year. The word that I would use coming out of London Pulp Week was most probably a fairly muted conference. And when I say muted is historically in the past, you obviously do all of the discussions with customers, you go through volumes, you start having some pretty serious discussions around commercial terms for the contracts for next year. And I think on the volume front, we're actually, I would say, rather pleased to see not only a confirmation of the key contracts we have, but ultimately also some additional volume requests, which we felt was quite positive. But in terms of the commercial, very few commercial discussions actually took place to the level where they have been in the past. And part of that, I think it's both on the customer side as well on the supply side. I think there was some caution approaching those discussions given the current momentum. So it certainly requires a bit more interaction, and that will happen over the coming weeks. The other 2 things that I think were clear, as I mentioned earlier, the view that there is the supply-demand balance is skewed towards the longer supply, and that obviously that was part of the reason why some of those discussions have and will likely correct somewhat. But the other clear indication is, I think everyone was pretty clear that the industry has reached the bottom over the summer. And we're looking to see some positive development over the coming months and certainly over the coming years that was general perception from us.

[Operator Instructions] Our next question comes from António Seladas from A|S Independent Research.

I have 3. First one is regarding dissolving pulp. I noticed that you sold less pulp -- less dissolving pulp, sorry, year-to-date than last year. So if you can explain the reason. Second one is related with capital spending for 2026, if you can provide some figures. And last one is regarding -- is related with cash flow that has been very weak, actually negative for the last 2 quarters, at least, so a net debt-to-EBITDA at levels not seen for a while. And taking consideration that the pulp prices even that they improve, no one, I think, is expecting a strong [ healthy ] pulp price. So it seems that your free cash flow will remain weak. So should we expect -- there's any level of net debt-to-EBITDA, sorry, that we will not like to surpass?

António, may I ask you to clarify the first question on DP?

Sure. Dissolving pulp, you sold less dissolving pulp this year than last year, I think. So if you can explain the reason for it.

Well, in terms of dissolving pulp, just to be clear in terms of the overall volumes, there have been -- if I think of it for the 9 months, so we have a number of trials ongoing for Biotek. So most of the volumes that you see there in essence is the volumes from China. But overall, I would say this year for the first half of the year, I think we've made that comment because of all of the tariff implications, demand was soft, in particular on textile, and that was the primary reason. But in terms of Biotek, we now have well over 10 qualification projects underway, some with existing customers, some with new customers. We're also qualifying beyond textile into the pharma market. So I wouldn't overread in terms of those numbers given the weakness of -- or the softness of demand in the first half, but also the fact that Biotek currently, the campaigns that have been done are primarily focused towards qualification. Regarding capital expense for next year, we're clearly aiming at somewhat of a reduced level of capital investment, primarily focused on completing both the conversion of Biotek and also the acetic acid and furfural, which will be complete by end of first quarter, early second quarter. So the focus is on those projects. There's still ongoing maintenance CapEx and environmentally upgrade-related CapEx, but the intensity for next year will be somewhat lower compared to what we have for the next -- for this year. Regarding the cash flow, this year, obviously, with the current environment and in particular, when it comes to the overall margins for the business that has generated less cash, I mean it's where we expected. But given the trend in terms of pulp prices and what we see going into next year, we do expect an improvement in terms of the net debt-to-EBITDA ratio. And maybe I'll ask Miguel if he wants to comment further.

Yes. Just on top of what Jose said, we will be, of course, focusing on the strategic investments that we are doing and that we have to finalize next year, namely the acetic acid that will be producing from 2026 onwards and also the conversion of Biotek to dissolving pulp, which we think will be finalized at the end of next year. But there will be also some one-off events that will benefit 2026. One is the subsidies related to those investments, which the major part will be received during 2026. So we will have an important part of subsidies that we expect to receive next year regarding the subsidies. And also this effect of the corporate tax that we have been doing advanced payments this year based on 2024 profitability. But as we can see that 2025 profitability is not the same, we will be receiving some extra amounts paid this year. So I think this will also contribute for a better cash flow next year.

Our next question comes from Manuel Lorente Ortega from Santander.

My first question is regarding trends on the dissolving pulp industry. I believe that you mentioned, and correct me if I'm wrong, but you used the word caution to reframe the feedback from the London Pulp Week as a whole for the industry. However, on dissolving, we have seen higher negative pressures on the recent quarter, at least pricing-wise. So what we should expect for next year in terms of prices for the dissolving industry?

Thank you, Manuel. I'll say in terms of the key trends on dissolving pulp, the fundamentals remain pretty solid. This year, as I mentioned, the first half of the year, you've seen some softness, a lot of it related to destocking within the value chain because of the tariffs. There was a significant uncertainty associated with those. I think that's reversed now in the second half. In fact, we see utilization of capacity in the industry for end-use fiber production at higher levels than in the first half. There we haven't yet fully seen a restocking process taking place. We expect sometime into next year that some of that will happen. But overall, the fundamental trends in terms of dissolving are still there, either on the specialty side, on the fiber to fiber substitution, in particular, hardwood replacing more of the softwood in terms of fossil-based raw material fibers undergoing some replacement by renewable sourced fibers. So I think a lot of those will continue to play out. In terms of prices, if you look at the current level, you're still in the range of 40-plus percent higher than the paper pulp, which has been pretty much in line with industry trends. Currently, prices have been well above or around $300 gap versus the paper prices. And ultimately, we'll continue to see that happening into next year, perhaps even with less volume.

And conceptually speaking, is there any reason why this premium versus standard pulp prices should narrow or widening? I was thinking, for example, in the context of higher fiber to fiber substitution trends, it is fair to say that, that premium should narrow to some extent?

I wouldn't necessarily see a narrowing in premium. I mean, at the end of the day, you have 2 very different pulps. If you think of dissolving pulp, it has to undergone significant processes, purification processes, you're extracting a lot of different materials chemical versus some sugars, minerals, et cetera. That's an extended process. And ultimately, purely on a specific consumption, we used to end up with the same ton of dissolving pulp, we have to use more wood. So the basis for a delta in terms of pricing is always going to be there. And I think historically, there's been some use of a hybrid type of pulp that requires significant purification processes, which has a significant cost. So I don't see at least any significant reason why that gap should narrow. And in some specific segments, it may even increase hardwood dissolving pulp is purely from a pricing perspective, it's more attractive than softwood because ultimately, softwood has significantly higher cash cost associated with it. So I would say, over time, in some of the more specialty applications and when I mean specialty, specifically going beyond the which is textile fibers, I think you'll see even the possibility for some expanding that [indiscernible].

Okay. And just my final question regarding cash cost trends, if I have understand it correctly, you pointed that a significant part of the improvement in cash cost comes from an efficiency -- a higher efficiency process on the wood cost. I'm a little bit puzzled with that in the sense that my perception was that dissolving would imply a higher consumption of wood and [ ergo ], higher associated costs regarding wood. However, you keep on improving significantly the cash cost throughout this quarter. So that assumption is correct. Yes, dissolving comes with a higher wood consumption. So -- and if that is correct, then we have seen a meaningful improvement then in terms of wood cost on the other side of the business. Is that the correct way to see this? Or is any missing point that I'm not taking into consideration?

No, I think it's correct. So if you start from the assumption that all of the inputs remain exactly at the same price level or in this case, at the same cost level, particularly considering variable costs, the more migration or the higher the production of dissolving pulp, you would expect, in fact, with a combined cash cost to see an increase in that cash cost. So the fact that you're seeing a decrease is a reflection of what I said in terms of some improvement on the input prices of the variable cost components, but also in terms of a higher stability on fixed costs. Just to note that when we start thinking in terms of variable costs for DP. Caima, which, in fact, is, by all measures, a small plant in the global context of DP or at least a small to -- but it's on the lower end in terms of capacity. But Caima is probably at the top end in terms of the lower cash cost. And a lot of that deals with efficient use of the inputs, the particulate species of eucalyptus hardwood that we use in Portugal allow us to have a very, very strong efficiency use in terms of specific consumption, significantly below what's the standard for the industry. So as I said, it all remains the same. The more -- or the higher the weight of dissolving pulp, you should see higher cash cost. The fact that you're seeing a reduction in that cash cost actually speaks to the significant work that I think our teams have been doing at managing the cost inputs and on the operational side of reaching very, very high efficiency rate.

[Operator Instructions] Our next question comes from Bruno Bessa from CaixaBank BPI.

Just precisely a follow-up on the cash cost front. If you could give us an indication of your expectations about cash cost evolution for next year? And also related with this topic, when do you see your cash cost stabilizing under a scenario in which pulp prices recover $600, $650 per ton. Where do you see your cash cost structurally stabilizing in the future? And lastly, just a bit of a more technical one. I saw in Q3 a relevant reduction in terms of net financial costs. So the -- what is left between EBIT and earnings before tax. So the number I get is EUR 2 million negative compared to EUR 11 million in Q2 and EUR 8 million in Q1. Just trying to understand here what was the driver behind this, if there was here any kind of hedging -- currency hedging effect or something that could explain this decline? Just trying to extrapolate for why it's less from the year.

Thank you, Bruno, for the follow-up. Perhaps Miguel will be able to give you a bit of an outlook and specific on the net financial cost, and I'll follow up with...

No, it's a fair observation. In fact, we've been increasing our financial costs. First of all, because we've been paying less interest. So also the rates have been decreasing and that has an impact on the amount of interest that we have to pay. There is -- also this year have been very challenging in terms of FX gains and losses. And on the previous quarters, we have been significant losses in FX due to the depreciation of the currency, the ongoing and continuous depreciation of the U.S. dollar, and we had a better quarter on that side also that helped the improvement on the financial results. And as Bruno mentioned, we also have some hedging. And the more the U.S. dollar depreciates, the more we gain with that hedging. And in fact, in this last quarter, we had also an improvement in terms of the result of that hedges. And all this combined, there is a significant improvement in terms of financial costs for the quarter.

Thank you, Miguel. Just one additional note in terms of -- because you asked around cash cost future trends and I would say for us, I mean, we see a continuation of the current detailed focus in terms of our cash cost structure. Obviously, as I mentioned before, the fact that you're doing more dissolving pulp will likely to see some pressure on the average cash cost of pulp. On the DP, we're talking about our cash cost across units, starting with Caima to be at the market or close to being market leader. And in terms of paper pulp, I mean, the fact that we have continued to reduce, it means that we've seen some increased reductions on paper pulp. So looking into 2026, our expectation is that we'll probably continue to see some additional efficiency, but you probably -- the trend that you've seen this year, I think for next year, probably on an average annual price will be somewhat at a similar level or again, a very low single-digit reduction.

There are no further questions from the conference call. We'll now start with the written questions. Our first question comes from Carlos de Jesus from CaixaBI. Could you update us on your view on growth alternatives to the Gama project? If the project eventually does not go ahead, do you see the company targeting more dissolving capacity apart from the conversion investments already being made in your own infrastructure? And would this be through acquisitions? Or are you open to downstream opportunities in sustainable textiles?

So if I think through in terms of implications, our Gama project is a unique project on its own. It has a very specific structure. And clearly, our objective with Gama was to continue to increase our presence in DP and also taking a step further in terms of sustainable textile opportunities, downstream opportunities. Both of those, we continue to pursue projects within our existing infrastructure, as you've seen. And ultimately, our direction of travel in the long term is going to continue to focus on increasing our presence in DP and in sustainable textile. So whether that will come from capacity optimization, I mean we still have some optimization to do even within Biotek after conversion. We obviously continue to be open in terms of possible opportunities on M&A in the future. But our focus right now is on the key projects that we have underway, and we'll see in terms of the Gama project, ultimately when we have -- when we receive the green light for that project, how it looks like in terms of the overall structure that we may end up adopting. As you know, that project will be a project that we would undertake with partners, which is a little bit of a different structure compared to all of the other projects we're doing directly within Altri perimeter. So just an additional note in terms of the downstream opportunity in sustainable fibers. The acquisition of a majority stake in AeoniQ not only gives us control over a market leading next-generation technology, sustainable textile, it allows us to do integration within our own facilities. But ultimately, I think it positions us in a very broad at scale opportunity that we take -- we have the intention to fully take advantage of. But that's more of a longer-term result.

Our next question comes from Luis de Toledo from ODDO. Regarding wood availability in China. Besides the construction sector relaxation, do you see other structural reasons, which could explain the reduction in cash cost in China and Indonesia?

No, I think the -- so the situation with stronger availability of domestic fiber in China has been playing out over the last few years. There's been a significant reduction in construction activity. There's still quite a bit of remaining. But I think the current balance in terms of end users for that domestic fiber, it's probably not going to change dramatically in the future. And if anything, what you're seeing is, to use fiber into pulp application, it's the lowest return for our stockholders. And the market has in and of itself been restructuring significantly, but we don't see an increase in terms of available area. So the question is whether there's going to be a change in that ratio. But given how depressed the construction industry has been, I don't think you'll see much of a change. What you may end up seeing is upside pressure in terms of the cost of that fiber. And we've seen that play out through the summer. I don't expect that to change significantly. So when it comes to overall cash cost of operators in China, Indonesia is a bit different, and I'll get to that in a minute. But in terms of China, I see actually some downside risk in terms of increased marginal cost for those operators because of the upward pressure. If you look actually at the statistics, even while we've had an increase in usage of domestic sourced wood, imports remain relatively at the same level. So it was not a substitution of imported fiber, particularly from Vietnam, which is the majority of -- the major supplier of fiber into China. But the new integrated capacity is taking advantage of that greater volatility of domestic wood. So I personally, at least from our understanding and from a number of investigations we've done recently, we don't see that changing very significantly, if anything would be to the downside on the marginal -- on the -- in this case, the increase in the marginal cost. Regarding Indonesia, it's a very different play out. None of that wood also is certified. There's been some plantations of lower grade fiber that usually has implications also from an operational capability. Clearly, there is some additional space for new plantations, but if it comes at the expense of deforestation that has huge implications of where that pulp could end up and with some increased regulation and increased requirements and traceability, I think that's not going to be necessarily an easy proposition. But as I said, operationally, it's much less efficient. So even if you were to have an increase in Indonesia availability, it will come at a high expense both from an environmental footprint as well as from long-term financial sustainability. And you can see that just considering some of the delays basically in the [ big key ] expansion project, which has consistently suffered delays because of that equation not being necessarily...

So final question comes from a written form, which is regarding the dividend outlook versus the EUR 0.30 that were distributed last year given Altri's lower results and challenging market environment? I'll pass to Mr. Jose Pina.

So just a quick comment on that. Obviously, we have been very focused on shareholder remuneration. As you all know, we do not have a dividend policy, but that has not precluded us from being having a continuous dividend outlay. This year, we had somewhat of an increase because of the results -- in spite of the good results of last year. We'll assess that in the early part of next year. But clearly, we will be continued on shareholder remuneration as a key element of our value proposition and I don't see any significant reasons why that would necessarily change. And we've done that over different parts of the cycle. So it would be not -- it wouldn't be necessarily different that's a decision we always make in the first quarter of the following year.

This concludes today's event. We thank you all for your presence. Ladies and gentlemen, you may now disconnect your lines.