Emirates REIT (CEIC) PLC (REIT) Earnings Call Transcript & Summary

Hello, everybody, and welcome to today's Emirates REIT investor update. My name is Seb, and I'll be the operator for today's webinar. I will now hand the floor to Thierry Delvaux, CEO, to begin. Please go ahead.

Well, good afternoon, ladies and gentlemen. Welcome to this Emirates REIT investors update. We will -- we have 3 people from Equitativa today on the call. Our CFO, Mike Davis, our Head of Asset Management, Ross Mclaughlin, and my name is Thierry Delvaux, I'm the CEO of Equitativa. I have joined Equitativa 18 months ago. Prior to that, I was with a company called JLL, Jones Lang LaSalle for 25 years in pretty much the 4 continents across the world. I have done real estate -- commercial real estate for the last 30 years. We can pass the next slide, please. Over to you, Mike, to talk about the transaction overview. You're on mute.

Thanks, Thierry. For those of you who have not had a chance to meet, my name is Mike Davis. I joined Equitativa in August of this year. Prior to joining Equitativa I spent 18 years working in Banking. I started my career in the Americas, but also spent time in the U.K. and Asia. Since 2018 I've been based in the Middle East, primarily spent my career working with HSBC. And in my final role with them, I was at the Head of the Corporate Commercial Bank for the UAE. When Thierry approached me about the CFO overall, I jumped at the opportunity. Our thinking was really well aligned. Emirates REIT's got great assets and some really good cash flow, but we both felt there was a lot of upside still available to the REIT. And I think we're just starting to get that upside message out. I think the BB rating for the Sukuk validates our story. But to Thierry's point, and what he's going to talk about later, there's a lot more to come. I'm going to speak a little bit about the Sukuk now following our press release last week. We've gotten quite a few inbound calls from investors. So I'm going to try to address those over the next 2 slides. As many of you will be aware, last Thursday, Emirates REIT agreed to terms on a new $205 million Sukuk. The Sukuk is rated BB+ by Fitch and is secured by Index Tower. The proceeds will be used to cancel the remaining $200 million of our old Sukuk to pay fees and for general working capital. We have provided a projected 2024 year-end capital structure. Projections are given as a range here for cash and EBITDA. If you take the midpoint of our expected year-end cash and 2024 projected EBITDA, our debt-to-EBITDA is 4x. This is a really strong result, which is typically associated with investment-grade real estate companies. Move on to the next slide. I try to cover off on some of the key terms. So I think most importantly, the profit rate is 7.5% for the first 3 years with a small step-up of 75 basis points in the fourth year. This represents a 33% reduction versus what we would have paid in the year 3 of the old Sukuk. We have 4 financial covenants. There's a group LTV, there's a collateral LTV. There's a profit coverage ratio. I think importantly, here, the PCR will be calculated on a pro forma basis for the next 3 quarters, so we don't get punished for what was a historically very high finance expense. The fourth covenant is a minimum cash balance of $10 million. Covenants will be tested quarterly, and we would expect them to be well on side across all testing periods. Governing law will be English law and the DIFC. And finally, I've had a few questions about expected liquidity and trading support for the Sukuk. And we think that the local dealer community will support our Sukuk. We've already seen quite a bit of interest. And this support will, of course, be backstopped by HSBC. We're going to trade it both locally as well across their global footprint. Thierry, back to you. for a company overview.

Thank you, Mike. Thank you. So Emirates REIT was basically the first Shariah-compliant REIT in the Middle East. It was established in 2010, and it was the first REIT to be listed on the NASDAQ Dubai in 2014. Today, the REIT manages $1.1 billion in assets, which are primarily office assets and some education. We have 3 schools, a little bit of retail within our main core asset, which is Index Tower. It's important to know, we'll talk about it later that the strongest asset class in the UAE right now is the office market because it's a heavily undersupply market. I'll share with you, when I joined, I started July 2018, we set up a very simple strategy, a strategy of 3 pillars. The first pillar was to optimize rental income across the portfolio. We put together a very simple business plan for each asset to increase the occupancy, to increase the average lease length and to increase, obviously, the rental rates. That has been a very good success since we are now close to 93% occupancy across the board, and we were at 84% in 2023. The second pillar of the strategy was in a strong market such as the one we have in Dubai right now, we should look at selling some assets at a premium. We sold 2 assets. The first one was an asset that I didn't believe was a REIT material asset, if you will. It was a small retail center. It took us a while to sell it because it was not an easy asset, but we finally sold it above valuation. And the second one was very strategic. It's an asset, it's an office building, which we sold for $190 million, which was actually 31% above the valuation. So it was a great success. By doing this, we reduced our LTV to 25.9% which is what I wanted to do to achieve the third pillar, which was the refinancing of the very expensive bonds that we had in place. And as you know, and Mike just explained, we just agree on this new Sukuk a few days ago. So we completed that strategy that we put together in 2023. And right now, 2024, we'll talk -- 2025, we'll talk about it, but it's a year of continuing to capture the rental growth that we are expecting into the market in 2025 and keeping a very low and very healthy LTV. What I would also say is having spent 30 years in commercial real estate, mainly in the United States, Europe and Middle East, I have been fascinated to see the way that the asset manager was organized to run the portfolio. And I'll say just one thing is that there's a software that has been built by the team here about 15 years ago, and that software that includes a lot of AI functions is managing the portfolio on an absolutely exceptional basis. So the point I'm trying to make that from a governance perspective, this business is extremely solid, and I'm very proud to be in the position where I am right now. I think I will pass now to my colleague, Ross, who can give you an overview about the assets that we have in the portfolio. Thank you. Over to you, Ross.

Thank you, Thierry. So as Thierry mentioned previously, Emirates REIT owns and operates 8 commercial properties in Dubai, 5 in the office sector and 3 in the education sector. The office component comprises the largest part, around 73% of our net property income with the education assets providing about 27% of NPI. The weighted average lease term across the portfolio is 6.6 years as at Q3 2024. And as Thierry mentioned just now, we have in place a very proactive strategy to increase the WALT on our portfolio, and we've been seeing some significant success in being able to tie our tenants into longer-term contracts of late. The properties occupy specific locations and submarkets within Dubai. And this provides a level of diversification, which helps the portfolio, specifically in positioning the assets for different types of sectors and demand. So I think, first of all, looking at our biggest asset, Index Tower, location #1 on the map, biggest asset located in DIFC fast-growing financial center. It's experiencing a huge growth in business licensing in the past year. And our tenant base and the project focused on financial services, investments, professional services and corporates. So quite a sort of specific target market there. If we then look at the loss in Building 24, different location, Internet City, a location which has benefited from the growth of tech companies within Dubai, marketing, advertising, some of the other more creative and tech-focused industries, and that's really helped some of our assets as well. And then we have European Business Center located within Dubai Investment Park. Again, slightly different core segments of industrial logistics, manufacturing type companies. So the office portfolio caters to different types of sectors and different demand profiles, which has been very helpful over the past 12 months and will continue to help the portfolio moving forward. The 3 schools, again, 3 distinct locations, the French school located very close to the CBD and DIFC GEMS, another very successful school located right next to the main residential hubs in Dubai, Arabian Ranches and the major projects in that vicinity with great access to those communities. And then Durham, which is located in a growth corridor focused around the DWC and Dubai South. So lots of new residential development happening around those locations. I think we can move on.

Thanks, Ross. Before we dive into Ross's explanation of the performance of the REIT -- of the operational performance of the REIT, sorry, thought we'd just touch on the financial policies and risk management. And these policies tie in closely with our bond rating and our strategy. So leverage going forward, we're focused on a 30% FTV. This is conservative compared to our historical levels, but we believe it's the right level for the REIT. M&A, we don't have any plans for further asset sales. We may acquire new assets in the future. We don't have any target acquisitions identified at this time. And of course, any acquisition would be done within the target LTV mentioned above. Risk management liquidity, interest rate risk is hedged out here because of the nature of the Sukuk facility. And then FX risk is well mitigated. Our revenues are in UAE Durham, which is fixed to the U.S. dollar. And in terms of liquidity, we seek to maintain $15 million minimum liquidity at all times, and it tends to be a little bit higher than that. Finally, shareholder return. Shareholder return is made up of 2 factors, obviously, capital appreciation and the share has done quite well over the past couple of months and dividends. And cash dividends are going to be based on pro forma cash modeling and conservative coverage or cash coverage ratios going forward. [indiscernible] Do you want one more? We have just a few key credit highlights. I think we've covered some of these points and other ones are going to be more explicitly discussed later in the presentation. I think the key messages we'd like people to take home are that there's a new and experienced leadership team in place. The Dubai market fundamentals continue to support the business, both in terms of higher lease rates, but also longer lease terms. We have a diversified portfolio with really limited tenant concentration, and we've got conservative financial policies. Now I'll flip back to Ross who's going to go through the market overview and some of our KPIs.

Okay. Thank you, Mike. Yes. So the real estate market continues to be very robust in Dubai and the UAE, underpinned by strong fundamentals, strong GDP growth this year, forecast at 3.7%. And the PMI indicator has been consistently high this year, reading 53.8% as of September Q3. So continued expansion of the local economy. This has helped all sectors. We -- I think we've all seen the strength of the residential sector. Hospitality is also doing well. But relative to our portfolio, the office market is performing very, very well with prime office rents up 11.3%. And also, we've seen the education sector benefiting significantly from the high levels of population growth that the city has been experienced, coupled with quite limited supply of new schools coming online. I think looking at the office market a little bit more closely, we see growth across -- so we can go back to the previous slide. We see growth across more of the -- most of the office grades or all of the office grades and up to 24% in the Grade B sector. If we then look at the portfolio, we are happy to say that we've been experiencing similarly robust levels of growth within our assets, index up to 15% on market rents. European Business Center has been a real standout at up to 30% increase on market rates and Building 24, our newly refurbished asset where we have been seeing our headline rate increase by around 20% year-on-year. So we are seeing this growth across the portfolio, which is very, very encouraging. Occupancy is high. We are now at 93%. The market level is now north of 90% across most grady assets. And this has really helped to support rental growth across the city. The supply pipeline is also quite limited. I think looking specifically at DIFC, there are some new projects being launched, but we don't expect to see any new supply come to market for the next 2.5 to 3 years. So there's still a very good runway for more rental growth at Index and also across our other assets where the development pipeline is extremely limited to date. So looking at rent specifically, and this has obviously been quite an exciting journey for us this year because we've seen a huge growth in our rents. And we're also benefiting from a lot of our leases expiring. So our leases have been coming off of some historic deals and historic rates, most notably at Index, and that's allowing us to increase our rents to quite healthy levels. We can see here from the first chart that our share in core rate is at around 66% increase on the market rate. So we can achieve a 66% uplift on market rate there and around 22% to 32% for our smaller offices at Index Tower. So there's a real scope for more growth here. And in terms of renewals, this year, we had a retention rate of about 80% at Index. So we were able to renew leases at very healthy increases on that 80%, but also on the 20% that did not renew, we've also been able to increase to market rates. And we've had almost no void periods experienced within the asset as well. Next year, we have around 28% of leases expiring by value. So we, again, are looking at quite an exciting period to grow the revenue within index and some of the other assets. So it's looking positive for more growth. And the story is the same. As you look at the chart on the right-hand side, we can see that on our other office assets, we have more room to grow of up to sort of 40% on European Business Center. All right. Moving Forward. So this -- the positive performance has been clearly feeding into our net property income. And you can see here that there is real momentum as the occupancy and rental gains continue to come through into the assets. The NPI increased by 16% in 2023, and we expect an increase in full year '24 despite the sale of 2 assets during this year. In H2 '24, our NPI recorded 34.4% and the standout performance were Index and European Business Center, but with all assets experiencing healthy growth. Likewise, the valuation of the portfolio has improved consistently post COVID, and we can see that the stronger operational performance in NPI is resulting in higher asset values. And we believe moving forward that we'll see more growth within the valuation of the assets. Occupancy, which I think we have touched upon, we are now at close to 93% on the portfolio. So we sort of crossed that critical threshold of 90%. And we've seen really since that point, our ability to negotiate much harder on the lease renewals and the lease terms has really increased. And that gives us a huge focus in the next quarters to renegotiate our leases at significantly higher rates. So big improvements at Index, European Business Center, another standout performance, significant amount of take-up during this year. And we also have seen similar stories within our other assets.

Thanks, Ross. I'll pick up on the historical financial performance. Particularly focusing in on Q3 here. I think many of you would have seen that we published our Q3 fact sheet last week. As you can see, the sort of lease rate and occupancy increases that both Ross and Thierry have spoken about which fed right into our financials. Q3 total property income was $62 million, which is up 13% on 2023. At the same time, property operating expenses were down slightly, and this is a result of the strong focus we've had on cost management across the organization. Increasing revenue and declining expenses leads to a year-on-year 16.5% increase in net property income. The management fee has increased. This is a reflection of the increase in asset valuation. The allowance for doubtful accounts is down significantly, reflecting current market conditions. The net effect is a 23% increase in EBITDA to $39.4 million. Unfortunately, the very high cost of financing drags down an otherwise great first 3 quarters. Q3 FFO is still negative, however, shows a very significant improvement on 2023. The strong increase in the value of our real estate portfolio leads us to a 60% increase in profit for the period. For Q3, I'm not going to talk too much about the balance sheet as the sale of Office Park happened post close to the Q3 financials and essentially reset our figures. As you saw on an earlier slide, we expect to close the year with growth Islamic financing of $253 million, which is a 40% reduction from the Q3 close. Okay. So in terms of financial projections, you'll note that we've given a range for all line items. Please be guided by the midpoint of the range. Our revenue projections are not based on a significant increase from current market rates. The majority of the income uplift is from existing passing rate being brought up to current market rate as lease contracts expire and are renewed. There's a slight dip in revenue in 2025. The drop of income is a result of the Office Park sale and is partially offset by the increase in lease rates and occupancy across our other properties. EBITDA levels are similarly affected, but the effect is reduced as cost control remains tight. Most importantly, finance charges dropped very significantly. We closed 2023 with $441 million in financing. During the first 3 quarters of 2024, we reduced this by $188 million. At the same time, a reduction in weighted finance rate from 10.3%, which to be frank, was far too high for this business to 7.45% has led to a very significant reduction in finance costs in future years. For the past few years, no matter what Ross and Thierry did on the asset management side, our performance was undone by our cost of finance. This will not be the case going forward. We expect to have free cash -- positive free cash flow post debt service in 2024, which will increase in future years. And with that, the formal presentation is over. I think there are some questions in the room -- or sorry, on the chat. So we'll dive into those now.

Maybe I'll answer the first one. The first question is, thank you for the detailed presentation. May I know how REIT plans to utilize the remaining proceeds generated from the sale of Office Park? If you look at Office Park, we sold Office Park for a net $190 million. Approximately $75 million of that was used to pay the existing asset-specific finance with CBD and the remaining $105 million was used to pay down a part of our historic Sukuk. That totals $180 million. The remaining $10 million has been held on the balance sheet and will be used for general corporate purposes throughout the next period. Do you want to go to Slide 16? So Ross, there's a question on Slide 16, and average is just going to go there. Please, what percentage of leases in Index Tower are due to renew next year? Ross you're on mute.

Apologies. Next year is 28%.

Another question. When new supply comes in '27, will you be looking at new acquisitions to grow the portfolio? Thierry, do you want to take that one?

Yes. I would say I don't know so much space in the office sector coming in '27. I think it's more going to be like '28 -- until '28 I would expect the rent in the office market to continue to jump because the demand level is very high and there's just no supply coming. Growing the size of the REIT is very important. This REIT should, at some point, reach $4 billion to $5 billion, but now is not the right time. Now the right time is consolidation is the performance and the bottom line of the REIT and the market is too expensive for acquisitions right now. We will look at acquisitions when the market turns around, if there are deals out there that can be acquired at good terms, and then we will increase the value and the appreciation of those assets, then yes, but I don't expect that in the next couple of years.

The next question is, what is the current NAV following the sale of Office Park, the partial redemption of the Sukuk and the settlement of the CBD facility? The sale of Office Park occurred in Q4, and we have not released those Q4 numbers. But if you look at our Q3 fact sheet, you can see a net asset value of $648 million. And I think we've given enough information today that you should be able to back of the envelope solve for the year-end '24 NAV. Next question is, what were the historical drivers causing the occupancy rate increase from a low of 70% to mid-80s in 2022 and then low 90s currently? Ross?

Thanks, Mike. So I think in terms of the occupancy, maybe we can talk about 2023 and 2024 because I think we have seen some quite notable changes in terms of the demand profile and some of the transactions that we're doing. I think in 2023, we definitely benefited from the huge influx of companies that were moving into Dubai. And I think that at that time, within our assets index and the others, we were signing some -- a lot of deals for smaller spaces, maybe sort of shorter-term leases as companies enter the market. And that really sort of helped grow our occupancy and also help us to achieve much higher rental rates. I think what we've seen this year is slightly different. We are seeing our existing tenants expand. So we're seeing a lot of those tenants in smaller spaces wanting to grow within our portfolio into larger spaces. And we're also seeing more demand, more take-up for larger spaces from people within the marketplace as well. And typically, those transactions would attract a longer lease term as well. So we're seeing larger spaces on longer lease terms, which has been significantly beneficial for the portfolio. And we expect that to continue. We have a number of tenants now who are requesting space within the assets to grow.

Thanks, Ross. Next question, what is the call date for the outstanding bond? So our current Sukuk is extended through to December 2025. With the new Sukuk, we expect to repay this on December 13 or 14. We're still working the final day based on various cutoff -- bank cutoffs in Europe. The next question is a good one. Is there still expensive debt that needs to be refied after this deal? Do you have a plan for further bond issuance? So as the CFO, my plan is to always try to reduce our weighted cost of borrowing, but we do not have what I would term expensive debt remaining. And we, at this point in time, do not have a plan for further bond issuances. As another question. Does anything change on the collateralization? Can you please detail for the Index Tower? So the historic bond had all of our assets, excluding Office Park and GEMS World Academy for security. The new bond only has Index Tower. And as a result, a number of our other assets, Building 24, European Business Center, et cetera, the French school are now unencumbered. There's a question. Is there any tax implications associated with being a REIT structure if the company does not pay a dividend? Thierry, do you want to cover that?

The answer is I believe not. No. I know this is how some jurisdiction in other countries function. You don't have the tax exemption if you're not able to pay cash dividends in some of those markets. But we -- I mean, I don't believe that's the case in the UAE.

Additionally, I think looking forward, we have the intention to pay a dividend.

Correct.

Do you have a forecast for FFO in 2025? We are not providing a forecast for FFO in 2025. However, the information provided in the forecast should give you a very close approximation. Will there be any impact on the REIT's net cash flows next year following the introduction of corporate tax in the UAE? We've sought tax advice, and we've been guided that we will be tax exempt as a listed REIT. However, this is still subject to formal application for set exemption.

I will add to this, Mike, that there's a lot of noise on the market about potentially other REITs coming up to the market for that exact reason that in real estate, public REITs might be the only way to avoid the corporate tax. So it's becoming a very compelling and compelling structure for investors and developers in the UAE.

Next question, why do we not acquire assets by issuing additional shares to create value to go forward instead of taking on debt? At this point in time, I think the senior management in the REIT believe that our share is significantly undervalued. So we would not want to give away that value to anyone. We would have to do that if we used our shares to buy assets. Ross, one for you. What is your average lease tenor at a group level? And how can you be confident that expiring leases in the coming years will be renewed?

So the average lease term, excluding the schools is 2.4 years. That's actually increased by about 22% this year. And we have a very aggressive leasing strategy to increase it further. And we're now looking at minimum lease terms across most of the tenancies within the portfolios on renewal and on new lease contracts. So that will be minimum 3 years on the small spaces at index and 5 years on Shell and core space. So it's an increasing number, and we expect it to increase more. I think there's a question of our confidence, and I think that just has to relate to supply and demand. We found that on our recent lease discussions, we are in just such a much stronger position because of the lack of alternative options that tenants currently have in the marketplace, which is allowing us to sort of dictate the terms to have a stronger position.

I will add to this, Ross, that for whoever is not in Dubai, Index Tower is probably the second most successful office building in Dubai after ICD Brookfield. We've seen a couple of other ones like build one, but Index Tower is today driving the second highest rental rates for Shell and Core space, although we don't have any available anymore. If you understand Dubai, you will know that there is a significant buzz around the DIFC, which is the financial district. This is the place to be for most companies these days. So it would take a lot to actually create any risk for such a well-positioned asset in the market and an extremely iconic architecture and location as well. So I actually believe that index is only at the beginning of the value of the growth that it's going to generate over the next couple of years. It's also from a strategic perspective, located at the very beginning of DIFC, this is where the traffic with the new traffic that we are now experiencing in Dubai is actually starting. You will have tenants actually who work within the center of DIFC and they're renting parking spaces in our building and they walk from here because the traffic literally starts from our building. So we are located on the right side of DIFC. So I'm a strong believer that the growth we will see in Index Tower, especially what Ross explained earlier, what I call the COVID leases, a lot of them were signed in 2021 and are coming to expiration right now. So when they are actually renewed, they are renewed at a much higher rate. So just that will generate some significant growth over the next 3 years.

Thanks, Thierry. The question, would the current Sukuk holders need to buy into the new one? Yes, that is correct. Our existing Sukuk holders will be repaid on the 13th or 14th of this month. Ross, a question for you. How did the REIT manage to reduce the operating expenses in the third quarter of '24?

Thanks, Mike. So the -- yes, so the team is working relentlessly on OpEx management. I think the -- sometimes it's been sort of outshone by the huge rental growth within the portfolio, but we are also operating on very stable OpEx. And that is due to a very, very well-planned management of each of our fixed and variable OpEx line. And we are constantly tendering our services across all of our assets to make sure that we're getting the most competitive rates. And I think Thierry sort of spoke earlier about some of the historic performance and management of the assets. And I've been here since last October, but it's been very, very sort of encouraging for me to see the historic trend of OpEx within the Emirates REIT portfolio because if you look at it on an occupied -- on a cost per occupied square meter, the costs have actually been falling consistently for the past few years. And we are we are looking at some more savings in the 2024 financial year as well.

Thank you. Thierry, a question for you. If the market is too expensive to make acquisitions, why not sell assets?

We are a REIT is a long-term investment vehicle. I think we've achieved a historically low LTV. We do not want to start cutting in the muscle. So obviously, the we will look at potential acquisitions. They are still in a very strong market, sometimes some great assets that are coming or that were not performing that we can actually reposition. And we're looking at that. We're talking to all the banks to see what they have on their balance sheet. But we will only do deals where we feel very confident that we can very quickly appreciate the value to create value for our shareholders. But for selling assets being a public REIT right now, we already at the border of $1 billion. What we want to do is grow is not continue to shrink. Again, this is a long-term investment vehicle that now provides an opportunity for tax exemption. We don't want to be too small because then we would lose some of our shareholders' interest. So I hope that answers your question.

There's a question on credit rating target or commitment. So we've been by Fitch's rated the entity BB- and the Sukuk BB+. If you read the rating paper, there is some guidelines there on how we could increase our rating. I think speaking for all the senior management, we are keen to see the rating continue to improve. There's a question again, on the security for the new bond. It's 100% of Index tower. That is correct. There's lots of questions on dividends and just so that everyone is aware, we're unable to comment on forward-looking dividends. We'll make a decision on dividends during Q2 '25 once we have our year-end numbers, and we'll make an announcement at that point in time. There's a question here that is why not issue debt from banks, which is cheaper than a perpetual Sukuk? In the bank market, in the UAE, we are required to amortize banking facilities. So on a net cash basis, once you pay for interest and amortization, you see a greater percentage of your cash leave the organization, which would obviously have a negative effect on the equity holders and on debt holders. So a non-amortizing facility like a Sukuk is the best mix. And at an LTV of 30%, which is highly conservative, we think we're at the right ratio. There's a question on the triggers for upgrade on the bond rating. I believe if you look on the Fitch rating, which is on our website, there is some guidance provided there.

I see also a question regarding why didn't we repay why didn't we use full year the proceeds from the sale of Office Park to repay the Sukuk. It was already answered that we did and we did pay an existing bank loan as well. So 100% went towards the repayment of that loan and the Sukuk, just to be clear.

Scrolling through these. The question, do you envision taking debt to pay dividends going forward? The answer is no. And I think that ends the questions. I'll go a couple more -- maybe a minute more to see if anyone else wants to add another question. Okay. I think we're done. Thank you very much to everyone who joined and to work on and sukuk and equity holders, we look forward to engaging with you more in the future. Thierry, any closing comments?

No, thank you very much. As always, we've been working hard in the last 18 months. I think it's been a great success. And I think the success is going to continue in 2025. we are also in the right place. The market is very, very strong. We didn't talk so much about the education sector, but this is also a sector that is performing extremely well right now in the UAE. We have a very solid team that I'm very proud of here. So we're excited about closing this year, maximizing the value for our shareholders and continuing next year on in 2025. So thank you very much. We appreciate your time today.

This concludes today's webinar. Thank you all very much for joining.