ENCE Energía y Celulosa, S.A. (ENC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the ENCE 2Q 2026 Results Presentation. I will now hand over to Mr. Ignacio Colmenares, Executive Chairman; and Alfredo Avello, CFO. Gentlemen, please go ahead.

Good morning, good afternoon, and welcome to ENCE's Second Quarter 2026 results presentation. Thank you for joining us. I'm Ignacio Colmenares, Chairman and CEO. And today, I'm joined by our CFO, Alfredo Avello; and our Head of Investor Relations, [ Ms. Ynez Alvarez ]. I'm pleased to report that this quarter shows the results of our key strategic initiatives to reposition our product mix and strengthen competitiveness, with pulp returning to positive net profit and marking an inflection point for the company. In this context, let me briefly remind you of the four main objectives of our strategic plan. One, growth, higher-margin special pulp substituting BHKP. Two, local wood and biomass sourcing. Three, cash cost efficiency. Four, EBITDA growth in our renewable platform. All this without losing sight of a key source 10 priority, deleveraging we should progress significantly in the second half of the year, thanks to stronger cash generation and lower CapEx. Slide 4 summarizes the second quarter. Execution is the core theme. During the quarter, we reduced cash costs significantly. We benefited from positive pulp price momentum, our special pulp volumes continued to grow, and we made further progress in deploying our biomass-backed renewable energy pipeline. Starting with pulp. European gross BHKP prices continued to improve during the quarter. By the end of June, prices had reached approximately $1,410 per tonne. This momentum is expected to continue in the second half of the year. We may see normal seasonal adjustments during the summer slowdown, but we do not expect this to change the underlying trend. At the same time, we have delivered a material improvement in costs. Cash costs stood at EUR 455 per tonne in the second quarter, including an estimated [ EUR 4 per tonne ] impact from minor [ slice ]. This is EUR 33 per tonne below the second quarter of 2025 and EUR 67 per tonne below the first quarter of 2026. On a normalized basis, if we exclude the strike impact in the first quarter, the reduction will be EUR 24 per tonne quarter-on-quarter. The product mix also continues to move in the right direction. Special pulp substituting softwood products represented 34% of sales volume in the first half of 2026 compared with 30% in full 2025. We aim to increase its weight towards 40% in second half and more than 62% by 2028. In our biomass [indiscernible] renewable energy platform, the second quarter also showed relevant progress. Biomass to electricity production reached 154 gigawatt hour impacted by the planned annual maintenance shutdowns following severe flooding incidents in the first quarter. Renewable industrial heating advanced with the start of operations of two projects, [ covering fibers]. In addition, we have been awarded a landmark project with an estimated annual production above 350 gigawatt hour thermal currently in the final contractual phase. In biomethane, on organic development continues to advance with the first environmental license expected to the second half of 2026, this will be a key milestone to enable construction of our first projects. Alongside this, [ Lagalera ] remains a showcase for non [ other ] plants. Financially, consolidated EBITDA was EUR 27 million in the quarter, up 16% year-on-year and EUR 26 million above the first quarter. Pulp contributed EUR 23 million compared with a negative EUR 1 million in the first quarter, and Renewables contributed EUR 5 million. Net profit amounted to EUR 0.5 million. marking a clear inflection point for the company after several quarters affected by market weakness and one-off events. Investments amounted to EUR 33 million in the quarter, including cash out related to the Navia cost reduction and decarbonization projects. We reiterate our full year guidance. Cash cost of EUR 468 million per tonne, a reduction of EUR 15 per tonne versus 2025 and CapEx of around EUR 120 million, mostly related to projects already committed in 2025 and highly concentrated in the first half of 2026, EUR 82 million already invested. Net debt stood at EUR 493 million at the end of June, including $69 million from lease contracts according to IFRS 16 with EUR 179 million of cash. The second half of the year should show a deleveraging phase, supported by better pulp prices, improved competitiveness and lower growth CapEx after the first half investment peak. In short, the second quarter confirms the turning point we expected, higher prices, lower cash costs, a stronger but mix better EBITDA and visible progress in renewables. In other words, we are delivering on all our strategic KPIs. Let's now look at cost competitiveness on Slide 6. Our cash trajectory remains on track to meet our full year guidance of EUR 468 per tonne in 2026. The objective is to reduce cash cost by EUR 30 per tonne between '26 and '27. This is being achieved to the efficiency and competitiveness plan at the Navia and the Navia efficiency and decarbonization project. The second quarter shows that this plan is already delivering. Cash costs fell to EUR 455 per tonne, which is EUR 24 per tonne below normalized first quarter cash cost and EUR 22 per tonne below the fourth quarter of 2025. This was achieved despite inflationary pressures in logistics and chemicals due to the Iran contracts and despite minor strikes related to the corrective missile procedures in both fields. The efficiency and competitiveness plan has generated annualized savings captured on already -- or already in process of EUR 8 million in the first half of 2026. This includes the impact of process reengineering and digital and AI-enabled optimizations. But not yet the savings from head count measures nor from the investments in Navia that should start to contribute to cash cost reduction in the second half of the year. On the latter, the Navia efficiency and decarbonization investments have now been complete. These investments should contribute around EUR 8 per tonne on cash cost savings on an annualized basis. Therefore, our message on costs is unchanged, and even stronger than 3 months ago. The 2026 guidance remains. The initiatives are in execution, and the company enters in the second half with a more competitive cost base. Slide 7 looks at the pulp market. The second quarter consolidated the positive pricing momentum in Europe. Gross BHKP prices increased by 10% during the quarter and by 28% year-to-date, reaching approximately $1,410 per tonne by the end of June. This improvement is not only a short-term price movement. It is supported by several market fundamentals. First, Logistics disruptions have led to a clear decoupling between Europe and China. Europe has faced delayed and limited shipments of paper, stronger-than-expected paper operating rates and local inventories have remained low compared with 2025. This gives pulp producers additional room to sustain strong prices. Second, imported wood chip prices in China have risen in 2026, timing the market and potentially supporting a near-term recovery in part demand and prices after a period of flat performance. Third, the structural standard fiber-to-fiber substitution trend continues. Over the last 5 years, global fiber demand increased by around 4 million tons, while high [ wood ] pulp increased by around 6 million tonne of [indiscernible], by around 6 million tons and softwood pulp declined by around 2 million tonne. As a result, prevent so shutdowns are taking place. These closures should help rebalance the market and support the relative strength of hardwood pulp. Taking all these together, even if we see normal seasonal softness during the summer, we expect the market momentum in Europe to remain favorable in the second half of 2026. Moving to Slide 8. Our product strategy continues to progress as a key differentiator. Special pulp accounted for 34% of sales volume in the first half of 2026 compared with 30% in full year 2025. We expect to increase its weight to close to 40% in second half and to exceed 62% by 2028. This mix improvement is central to our equity story. These products are designed to substitute higher cost [indiscernible] in multiple applications. and they deliver an average incremental EBITDA margin of around EUR 36 per tonne versus standard BHKP. ENCE Advanced is our broad range of BHKP substitute pulps with different attributes, higher strength and bleached pulp, low porosity and softness, suitable for hygiene, decor, packaging and other applications. Our 2028 target is 500,000 tons with an incremental margin above EUR 30 per tonne versus standard BHKP. ENCE fluff is the other flagship strategic product. ENCE the sole European producer of fluff pulp based on eucalyptus wood competing with [indiscernible]. The 2028 target is 125,000 tonne with an incremental margin above EUR 50 per tonne. During the quarter, we successfully completed three homologation process and are currently working with 15 customers in the industrial testing phase. The key point is that our special pulp is not merely a premium labor. Customers choose these products for the performance benefits. It's not a filler, but a pure substitute of softwood does not require any transformation at the clients' production process. They broaden our competitive positioning improve margins and reduce our exposure to standard BHKP pricing. Slide 9 explains why the product strategy and the cost strategy must be viewed together. By 2028, more than 62% of our sales will come from products that compete for the BHKP. In this competitive scenario and sales position as the lowest cost player. In other words, we are not only lowering the cost of producing pulp. We are also changing what we sell and who we compete against. That is the most important strategic point. This repositioning strengthens ENCE in two ways. It improves the resilience in down cycles, because our relative cost position is stronger. And it increases operating leverage in up cycles because the product mix carries structurally higher margins. Moving now to the Renewable platform. Slide 10 focuses on renewable industrial heating. Our 2030 target is to supply 2 terawatt hour of renewable thermal energy and to contribute around EUR 30 million to EBITDA, with target ROCE about 11%. The platform is scaling progressively. We have 11 projects under negotiation of which five are under advanced negotiations. In 2026, we expect four projects to reach commercial operation and one additional project to reach ready to build. This means that we should end 2026 with five projects in operation compared with only one at year-end 2025. The most relevant milestone in the quarter was a landmark project awarded in May with [indiscernible], currently in the final contractual phase. [ Malone ] has partnered with Move to replace fossil fuel boilers at its [indiscernible] refinery with biomass boilers. The project is sizable with expected annual production above 250 gigawatt hour thermal, representing more than 17% of our 2030 target. This is our first major credential in the oil and gas industry. It shows that biomass-based heat is a credible solution for industrial decarburization, especially in processes that are difficult to electrify and where customers want to reduce exposure to fossil fuel volatility and CO2 costs. Continuing with Slide 11, our biomethane platform continues to advance steadily. Our target is to produce more than 1 terawatt of biomethane by 2030 and to contribute more than EUR 60 million EBITDA with a target ROE of above 11%. The pipeline is still outstanding. We have 41 plants where grid connection, [ feedstock ] locations and feasibility studies have been completed. Of this, 28 plants are already in the permitting phase, and we expect eight environmental licenses in 2026, 2027 period. We also continue to assess inorganic opportunity selectively, pursuing only projects that meet our industrial criteria and returned firsthand. Slide 12 illustrates the maturity of the biomass in pipeline. The full pipeline has an estimated potential capacity of around 4 terawatt, which is 4x our current 2030 target of 1 terawatt hour. This gives us significant optionality. We currently have one operational plant, 28 projects in advanced permitting and the broader pipeline at different stages of maturity. The advanced projects have already made material progress. Land options are signed or well advanced, gas [indiscernible] is secured, [ other ] analyses have been completed and feedstock availability is more than 3x plant needs across the pipeline. It is important because biomethane is a permitting intensive business. The quality of the pipeline is, therefore, not only measured by the number of projects, but by the maturity of land, grid feedstock and environmental work. In these dimensions, our pipeline is well positioned. The next relevant milestone is the first wave of environmental authorizations once obtained that will allow us to move from development to construction, while maintaining strict discipline on returns and leverage. I will now ask Alfredo to summarize our financial position and cash flow [ revolution ]. Thank you Alfredo.

Thank you, Ignacio. Good morning and good afternoon to everybody on the call. I will now walk you through the financial results for the second quarter of focusing on the P&L, cash evolution, financial position and sustainability highlights before handing back to Ignacio for the closing remarks and the Q&A session. Let me start on Slide 14 with an overview of our financial results. As Ignacio has explained, the second quarter marks a clear inflection point. Our prices in Europe continue to rise cash cost reduction program has started to show tangible results and the new efficiency and decarbonization project was completed during the quarter. At the same time, part of the price improvement is still flowing through the P&L with a usual lag. And the renewals business was affected by a concentration of annual maintenance shutdowns in the biomass electricity business. In the Pulp business, revenues reached EUR 156 million compared with EUR 146 million in 2Q '25. So in the renewal platforms, revenues basically remained flat reflecting lower production from planned maintenance shutdowns. At the EBITDA level, the improvement is much clearer. Group EBITDA reached EUR 27 million in the quarter, up 16% year-on-year and EUR 26 million above the first quarter of 2026. In the Pulp business, EBITDA was $23 million, up 13% year-on-year. It's worth mentioning in this comparison that the second quarter of last year included EUR 10 million of energy savings certificates, the so-called [indiscernible]. Compared with a negative EUR 1 million EBITDA recorded in first Q '26, the recovery is significant. It reflects higher pulp prices and our cash cost of EUR 455 per tonne supported by the efficiency and competitiveness plan. As mentioned by our Chairman, the annualized savings from AI initiatives and process reengineering captured in the first half of the year, amount to EUR 8 million. The benefits from the Navia efficiency and the conversation investment and the head count measures have not yet to be reflected in the lower cash costs. At the bottom line, net profit returns to positive figures. The key message is that the company is moving in the right direction with operational recovery already visible at the EBITDA level and expected to accelerate as higher pulp prices, lower cash costs and new projects contribute more fully in the second half. Turning to Slide 15. Free cash flow for the quarter shows a temporary peak in working capital and the final phase of several growth and efficiency investments, including the Navia efficiency and the carbonization project. Let me walk you through the main components of the cash flow bridge. Starting from EUR 27 million of EBITDA, we had EUR 6 million of maintenance CapEx and EUR 10 million of net interest payments. Working capital absorbed 11 million in the quarter, mainly reflecting the higher prices momentum and the inventory buildup, taking also the increase in deliveries to our clients. In addition, strategic growth and efficiency investments, most of which were initiated in previous years, required $27 million cash outflow, investment intensity will be much lower in the second half. At the same time, as Navia project, there are new industrial heating projects and the improved pulp price environment will begin to contribute more visibly to EBITDA and cash generation during the third quarter. Therefore, although the quarter still shows cash consumption, the direction is consistent with our 2026 message. Our first half investment peak followed by a second half [indiscernible] phase supported by stronger operating cash flow and lower growth CapEx requirements. Moving now to our financial position on Slide 16. At group level, Net debt stood at EUR 483 million at the end of June with EUR 179 million of cash. This increase compared with December '25 is mostly explained by the first half investment peak and the temporary working capital cash outflows already described. The pulp business financial structure remains [indiscernible]. This is important point. which will give us the flexibility to manage the cycle and execute the devaluating objective without covenant pressure. Debt maturities remain well spread and our funding sources remain diversified between banks and institutional investors, including the marked bond issued earlier this year. In addition, we have an undrawn revolving credit facility of EUR 130 million. In the rurals platform, the nature -- financial structure, sorry, also remains long-dated and diversified. We also maintained available liquidity lines include a fully available EUR 20 million RCF. From here, the priorities are clear: protect liquidity, maintain capital allocation discipline and reduce net debt as the second half [indiscernible] recovery materializes. Before handing back to Ignacio, let me briefly cover Slide 17, which highlights our main sustainability achievements during the second quarter. At ENCE, sustainability is not a stand-alone topic. It is fully integrated into the way we operate. It strengthens our cost competitiveness, supports customer preference improves access to fiber and biomass and reinforces our license to operate. Starting with safe and eco-efficient operations, the group's cumulative lost time injury frequency rate in the second quarter stood at 3.32 the best result across our entire historical series. Outdoor performance also remained strong. Now we recorded only 2 [ other ] minutes maintained excellent performance levels. On point reduced by 60% the [indiscernible] recorded in first half of '25. Moving to [indiscernible] Products and Ecosystem services. We obtained nine new approvals for specialty pulp under our portfolio, and we have submitted the application for the approval of our fluff pulp under the Nordic [ Swan ] and EU Eco-label schemes. We continue to make progress in first ship byproducts by one new [indiscernible] clone planned for 2026 and approximately 4,500 hectares of first since research for voluntary [ cabo ] markets. On responsible supply chain, appreciably 86% of the land we manage and 82% of the wood we source are certified, 100% of our sites assure system certified for sustainable biomass. We have also expanded our ESG and companies risk assessment to more than 1,400 value chain entities, and we are developing and deploying tools to comply with the EU differentiation regulation ahead of its entry into force. On positive total impact women represent 25% of total employees and 31% of managerial positions. Internal promotion accounted for 78% of job openings and entertain a top employer 2026 certification. Finally, on governance, the external audit of our criminal compliance management system under [ UNE 19601 ], has been completed confirming appropriate implementation and operation of their control mechanisms. In addition, the independent review for anti-bribery management system under ISO 37001 confirmed the robustness and effective operation of the system. These achievements reforce our leading ESG profile and more importantly, they translate into tangible business advantages, safer operations, lower resource intensity, a strong commercial proposition in special pulp and more resilient local supply chain. With this, let me hand the floor back to our [indiscernible] Chairman for the closing remarks and the Q&A session.

Thank you, Alfredo. I would like now to turn to Slide 19, we set out our 2026 outlook and closing remarks before we proceed to the Q&A session. We are focused on execution. The first results of our priority initiatives are now visible. And we are paving the way to the accomplishment of our 2028 goals in pulp and 2030 targets in renewables. I will highlight five key measures. First, the pulp market momentum in Europe remains positive. Normal summer seasonality may occur, but it should not alter the underlying trend, standard fiber to fiber substitution, low European inventories, logistics disruptions, higher wood chip costs in China and solid capacity closures, all support a favorable market environment. Second the cost reduction program is delivering. Cash cost was EUR 455 per tonne in the second quarter, a reduction of EUR 24 per tonne versus normalized first quarter cash cost. The efficiency and competitiveness plan has captured operating process annualized savings of EUR 8 million. And the Navia efficiency and decarbonization project has been completed. We confirm our 2026 cash cost guidance of EUR 468 per tonne, supported in the second half by the initial contribution from the Navia investments and head count measures. Third, our product mix upgrade continues. Special pulp represented 34% of our sales in the first half of 2026, and we target to increase its weight to close to 40% in second half 2026. By 2028, more than 62% of our sales should come from BHKP substitute products, supporting an incremental EBITDA margin of around EUR 36 per tonne versus standard BHKP and positioning ENCE as a highly competitive player in the BHKP segment in Europe. Fourth, the reliable platform is developing. Renewable industrial heating should end the year with five projects in operation compared with only one at year-end 2025. And the landmark merger project represents more than 350 gigawatt hour thermal peer. In biomethane, the first environmental license is expected in the second half of 2026. These milestones confirm the depth and quality of the biobank back to renewable platform, which is on track to almost triple EBITDA by 2030. Fifth, the financial profile should improve in the second half. The quarter already shows a clear operational inflection with consolidated EBITDA of EUR 27 million and the positive net profit. With good pulp prices, a more competitive cost base and lower investment intensity after the first half CapEx, the second half should show cash flow generation and deleveraging. Putting all of this together, our strategy remains consistent and disciplined. On pulp, we aim to increase sales of special pulp substituting BHKP to strengthen local wood and biomass supply and to reduce cash costs. As a result, the year 2028 should give us an incremental EBITDA margin per tonne of EUR 52 per tonne versus 2025 figures. On renewables, the plan is to triple our renewable castor EBITDA while protecting the balance sheet and maintaining capital allocation discipline. Thank you. We now invite your questions.

[Operator Instructions] Your first question comes from [ Max Mishyn ] from JB Capital.

So I have two questions. I'll start with the first one on the pulp business. Thanks for discussing the improvement in revenue per tonne and cash cost per tonne in '26 and '27 in I was wondering if you could give us more color on profitability and guidance on the overall improvement in cash EBITDA per tonne you expect in '26 and '27, like a bridge up until 2028.

I suppose you mean cash cost bridge, not cash bridge, okay?

EBITDA per tonne, if possible, like '26, '27, '28.

Okay. Well, as I have mentioned, we have a few strategic pillars, and they will allow us to improve our EBITDA by approximately EUR 52 per tonne, as I mentioned, by 2028 versus 2025. First, our product mix transformation, the substitution of standard BHKP with special pulp products and non-fiber pulp latitudes, together with on flat production. By 2028, these special pulp products will represent over 62% of total sales, and they will deliver an incremental margin versus standard BHKP sales of EUR 36 per tonne, of which at least EUR 22 per tonne are not yet reflected in our P&L. Then if we compare 2028 versus 2025, it will be EUR 36 per tonne by the better products we are developing, competing with BHKP. And out of this 36, 22 are not yet reflected in our P&L. Second, our efficiency and competitiveness plan will contribute an additional EUR 22 per tonne between '26 and '27. We are not yet working on cost reduction Finally, investment in Navia, the [ wood ] yard and replacement of fuel gas with pulverized biomass, which has already started, both projects has already started, adding a farther EUR 8 per tonne, starting third quarter 2026. Altogether, we'll increase the pulp EBITDA by EUR 52 per tonne in 2028 versus 2025.

And the second question is on biomethane plants. You now expect the first legal permit to come in the second half. What makes you more confident? And do you think the recent proposal on phasing in of biogas capacity in Spain can help accelerating the licensing process. Also, if you could just remind us how long it can take between the license and the commissioning of a biomethane plant, please?

Yes. Thank you very much. I would like to insist in our unique business model, which is based on the transformation of local agriculture biomass and [indiscernible] manure into a bio-fertilizer and biomethane with multiple benefits and without disturbing the local communities, no [ odor ] plants. And [ Lagardera ] is our showcase. That's very important for the permitting and the development of our site. We already have a portfolio of 41 bio-fertilizer and biomethane projects, out of which 28 projects are already in permitting phase, three more than a quarter ago, which already have land and feasibility studies. The pipeline is highly mature we expect to get around on environmental license in 2026 by the end of the year, seven more in 2027 and additional seven in 2028. As we mentioned before, we plan to build the plant with [ EPC ] contracts using nonrecourse project financing but by long-term PPAs, like we did in [ Lagalera ]. The typical construction period is 21 months including full ramp-up. And for your information, the initially estimated CapEx is approximately EUR 0.35 million per gigawatt hour. It was the last quarter 4, with an estimated average production between 80 and 100 gigawatt hour per plant. The target return on the capital employed is over. Despite our -- but I would like to insist that despite our initial goal is to generate over 1 terawatt per year and to contribute over EUR 60 million to EBITDA by 2030, we are developing a platform which could reach over 4 terawatt per year. And regarding your question, we positively view the recent news on [indiscernible] push for minimum by the same quarter before 2025, which will help foster the development of our pipeline.

Your next question comes from Alvaro Bernal from Alantra Equities.

I have one, if I may. It's regarding the cash cost guidance you have given for H2, [ 455 per tonne ]. At the same time, you're seeing you're going to see improvements or contribution from the Navia efficiency and decarbonization kicking in H2. So I mean, if it's the same cash cost as in Q2? And I want to know what doesn't make you be slightly more positive towards H2.

Yes. Thank you very much, Alvaro, the efficiency and competitiveness plan together with Navia cost reduction and decarbonization initiatives should enable to reduce cash cost by EUR 30 per tonne as we have said, between 2026 and 2027, EUR 15 per tonne in '26 and the remaining in '27. Our leases that in the first half of the year, we have already kept EUR 8 million in annualized savings without including any impact from the collective dismissal program and Navia efficiency and decarbonization investments, yes. 50% of the people who are leaving the company in 2026 left at the end of the quarter the second quarter, and the Navia efficiency and decarbonization project is just starting. We estimate the cash cost in the range of [ 450 to 460 ] in the second half of the year.

[Operator Instructions] The next question comes from Luis de Toledo from ODDO.

I have one question is regarding the negotiations regarding this [ Landmarc ] heating. I don't know if you could elaborate on the details if your negotiation just the price or the operating conditions, considering that it's a very large customer, is the operating model, the one you were planning when you introduced the business model for this area?

Could I ask you to repeat what is the name of the project you are mentioning?

No, then the landmark [indiscernible] project. Yes, just wondering if the negotiation -- I mean, you have announced the project, although it has not been signed officially, but I assume you give a lot of credibility of signing really soon. But I was wondering if negotiating the pending details on the negotiation, if you can elaborate why is it taking longer or if it's just a price or the operating model, considering that the customer, it's a large initial customer. And if you could provide any additional details on potentially on the contribution of this important contract.

Yes. Yes. Thank you for your question, Luis. But unfortunately, we are just now on the contractual phase of the project, and I cannot tell you more. It has been announced more by us or by [ Move ] has been announced by the [ Andean ] government and where we have a ownership agreement and they cannot disclose more information.

Okay. And the operating model of this is towards our -- the targets, the production targets is not materially different from the other contracts with smaller industrial clients.

No, no, no, it will be very similar things would change a lot is the size of the project.

Next question comes from Cole Hathorn from Jefferies.

Two from my side. Just the first one is simple. Just trying to understand the total CapEx costs, just an updated number for the year just so we can help with our models for both pulp and energy, just kind of a total CapEx number? And if you can provide anything for 2027, that would be helpful. I understand that, that may change if you commission new projects. Then on the views on pulp, you sound a lot more optimistic on the European net price differential versus China. And I'm just wondering how do you see that playing out going forward, you talked about differences between logistics costs. Historically, I always thought it was fair to have, let's say, a $30 million to $50 million a tonne net difference between European and Chinese prices just considering timing lags, contract differences and logistics. And I'm just wondering, do you see that [ rain ] kind of expanding into the future? Or what gives you confidence that the European kind of spot or net prices will be above the Chinese levels.

Yes. Thank you very much for your questions. I will start by answering the first question. As we have mentioned, we plan to invest EUR 120 million in the full year. We have already invested EUR 82 million. As you know, we have invested 67% in pulp, and we still need to invest EUR 7 million more on the second half of the year, and the total amount will be EUR 64 million. And what is important to point out is that in part the investment is 67% already done and [ 3% ] more in the coming quarter. In renewables, we have invested EUR 15 million and we still need to invest EUR 31 million in the second half of the year, and the total amount will reach EUR 46 million. Regarding your second question, well, I would like to point out that the dynamics of the market in China and in Europe or the states are absolutely different. We are still talking about the commodity. Commodities tend to have similar prices on different markets. but the dynamics are absolutely different. The number of customers in Europe is different to the number of customers in China. It's very concentrated. The main big customers in China are not only paper makers, but they are also today pulp makers. In Europe, our customers only make paper. We don't sell pulp nor as to move my competitors to the integrated pulp mills, and the dynamics of the market are different. I strongly believe that the pulp cycle remains in place. European the gross price stands at [ 410 ]. And we have a positive view, and it's based on three pillars. First, demand remains resilient, and our focus is in Europe. The demand in Europe is good. It's not extraordinarily high, but it's good. is better than it was 1 year ago or 2 years ago. And of that is the European port inventories are below the historical average, while consumption is holding up. Our European clients are placing larger orders as logistics disruptions originated by the Middle East conflict penalized paper imports from Asia. And on top of that, fiber-to-fiber substitution keeps adding roughly 1 million tons of structural BHKP demand every year. Second, China demand is also strong. growing. And one thing which is very important and everybody has to keep in mind is that they will keep importing the same volume of pulp [indiscernible] today. The constraint on new local capacity is good availability. Just for your information, the price of the [ book ] today in China, despite the recent decline on the last month is 17% higher than 1 year ago. and the [ chip ] imported to China are today, 21% higher in price than 1 year ago. New mills will mostly integrated and will cover China's demand growth. So part import into China will remain stable. And those imports are already 3% year-on-year higher than 1 year ago according to Chinese custom data. The recent price adjustment in China of $10 has been minor $10. It was 2 weeks ago, and it was flat last week, and prices today are stable. And third, on the supply side, the market is rebalancing. On top of this fiber to fiber, BHKP capacity is being converted into fluff, [ Suzano ], ENCE to dissolving pulp grades, [indiscernible], lowering BHKP supply. In parallel, loss-making BHKP capacity is being closed. Therefore, we see no pressure in the market today besides the seasonal summer slowdown. There is no doubt a summer slowdown. It may affect $10, $15 of prices, but we don't see any change or how the market is for now and for the rest of the year.

That's helpful. And then maybe just to add to your response. I mean there's going to be a difference in logistics costs from even the LatAm players shipping to China versus Europe. Would you mind just giving us a rough estimate of how much more expensive it is to kind of ship to Europe and then kind of the inland volumes, I think it's just useful context to have.

Yes, we can call you and we can put that on the website because I don't have the information now. I don't like to...