Exxaro Resources Limited (EXX) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Exxaro FD's Pre-Close. [Operator Instructions]. Please note that this call is being recorded. I would now like to hand the conference over to Mzila Mthenjane. Please go ahead, sir.

Thank you very much, Irene, and good afternoon to all who've joined us this afternoon. My name is Mzila Mthenjane, Executive Head of Stakeholder Affairs. I'm joined by our Financial Director, Riaan Koppeschaar; as well as the CEO, Dr. Nombasa Tsengwa. And they are accompanied by our MD for Minerals, Mr. Kgabi Masia; as well as MD for Energy, [ Leon Fourneval ]. And supported by Sakkie Swanepoel on the marketing and logistics side; Mellis Walker on the financial management for the Minerals business; as well as -- why am I forgetting his name [ Mokshwano Mahoi ], who is our Business Development Manager on the Minerals side. I'm getting a slap here from a colleague. But ladies and gentlemen, you would have seen the FD's pre-closing [ statement ] which was released earlier. And we will assume that it has been read. But I'll hand over to Riaan, who will just give a brief overview, and then we will open up for questions and answers. Thank you very much, and over to you, Riaan.

Thanks, Mzila. Good afternoon, ladies and gentlemen, it's a pleasure to engage with you again. I will give a brief overview of the expected performance, whereafter the Minerals team will discuss in more detail the expected sales, production and CapEx outlook. Firstly, we will look at safety, which is very important for us. You will see by the end of October, our lost time injury frequency rate was sitting at 0.04 against our target of 0.06. So this is indeed a good performance. However, we regrettably had a fatality at our Belfast coal mine for the 15th of August. We also reported that at the interim results. And unfortunately, Mr. Mathews Moanalo was fatally injured in the hard park area. An investigation has been launched, and all the learnings from this incident has now been implemented across the group and our operations. If we look at prices, the API4 coal export price is expected to average about $271 per tonne FOB for 2022. And the iron ore price [indiscernible] $116 per tonne CFR China. Looking at production, so the total coal production is expected to increase by 3% and sales volumes by 1% despite the logistical challenges that we're still facing, which the team will discuss later on, as well as the disposal of Exxaro Coal Central in September 2021. If we look at the energy operations, Cennergi is forecasting to generate 675 gigawatt hour of electricity, which is below the historical numbers and also our previous guidance. This is as a result of low wind conditions that are persisting in South Africa. Not only in South Africa, we're also seeing this trend globally in Europe. If we look at our debt numbers, as at the end of October, the group had net cash of ZAR 8.9 billion, excluding the Cennergi project finance facility of ZAR 4.5 billion. If we look at the portfolio optimization, you'll recall we launched a process to disposal of the Leeuwpan mine in 2021. But unfortunately, in the current environment, the progress on the divestment stalled. And hence, the decision was taken to stop the current divestment process due to these reasons. So this is just a high-level overview of the results. I will now ask the Minerals team to go into the production, sales forecast and CapEx. Thank you.

This is the operator. Sir, can I ask you to perhaps come closer to the microphone?

Can you hear me clearly now?

Yes. Thank you.

Okay, no, thanks. Just to touch where we are left on safety. We had an unfortunate incident. But what I just like [ to add ] is that all our operations did very well reducing the number of injuries by 50%. Grootegeluk has recently celebrated 10 years of fatality free [ shes] , and Leeuwpan is now going [ 22 ] years fatality free. The importance of safety is that if you have good safety, it gives you margins to focus on production efficiencies. But what I'd like to touch on before we get into the numbers is talk about the current operating environment, which has changed significantly. If we look at our operations, they are all designed with a system where we produce coal, and it's [ railed there by transmit to Richards Bay Coal Terminal ]. But that has changed significantly. We have now introduced what we call the logistical constraints. We're now moving coal through [ tracks to different ports ] and for us now, we've realized that it is important that we focus on the logistical capability. That is what we need to build in the organization because the environment is not the same environment where we designed our operations from the start. So Sakkie going to touch on that because this then talks about how we do business going forward. And as part of our long-term plan, that is what we focus on to say, how do we then configure our operating model to suit the new operating environment. Sakkie probably could touch on that before I get into the production volumes.

[ Our ] environment continued to be a challenging one, and from our side has probably steeply we are in a space where we try to make best use of all TFR capacity afforded to us, but they try to be quite innovative and flexible around where else can we evacuate [ coal ] and through which ports, which is becoming a bit of a challenge as the coal price goes down, and we can also touch on that maybe a bit later, but trying our best to still find ways to evacuate the coal. Okay. So if I can then touch in general on markets of where we stand. Despite all the volatility, we actually had good markets, very good markets this year. As we also told the market in August when we spoke to you was that we already were in a bit of an up cycle before the Russian Ukraine incident early in the year. And that then just made for a bit of anxiety in Europe in terms of energy scarcity, which really helped both coal and gas prices to go to very -- and high levels and unprecedented levels. So the first half of the year, a very, very strong period for us. Third quarter continued to remain fairly strong, although we started to see from Europe -- messages that Europe is stocking up. And then at the time when there were still customers that really wanted to stock up on coal before the winter, we then had the levels of the Rhine River really reducing and Amsterdam, Antwerp and Rotterdam become very full because the coal was coming in, but could not go down the river to the customer, which then had quite an impact on the markets and on pricing as well. We also, for September and October, started to see that they had a [ really hot ] or a warm autumn in Europe, which then also reduced the amount of coal and gas being used for power generation and heat. And that sentimentally in the market actually forced prices to further come down as people thought, well, they are then not going to even need all the coal and gas that they have stockpiled before the winter. Luckily now for us in November, we started to see temperatures really dropping. And I think we're much more positive. We'll have a very strong season from a consuming perspective on the energy, and that will be good for us as coal producers. So we do believe that coming out of the winter in '23, Europe will still be very short on energy. And we do believe that energy prices will be very well supported with that from a demand side perspective. On a supply side perspective, in Europe, we see a supply side impact from South Africa due to TFR. The same from Colombia due to a lot of community unrest and rail disruption by communities. And then, of course, they have the ban that they implemented on Russian coal supply. So we can see that from a supply side, the European situation is probably going to be fairly tight after the winter. And therefore, we are fairly positive on the current type of price levels into next year. We do not think we're going to go back to $300-type levels, but we really hope that we can sustain those levels around $200 per tonne on the high-quality coals from Richards Bay. If we then move over to -- but more east to India. India, a very interesting year, where initially India nearly stopped buying coal totally from a seaborne perspective due to the high prices earlier in the year. Then they came in the second quarter where they had huge electricity outages, and there was actually an instruction for power stations to import coal and to buy coal in spite of the high price, because India was running out of power. Then with the Russian situation, where Russia was blocked in Europe, we saw that Russia was starting to dump coal very cheaply in India, but also in countries like Pakistan and China. And India then actually had a big switch from South African coal for specifically the sponge industry to Russian coal. And then later on that proved to not be the solution because the Russian coal, the quality is not as consistent as the South African quality, but the initial indications of a very high fixed carbon in those coals proved to be also not as credible as was first claimed. So India has actually started to, in spite of the lower price of Russian coal, to move a bit back to South African coal on the sponge iron, which is your RB3-type coals, and we started to see those huge discounts that we initially saw at the high prices to narrow quite materially. We also saw that for the East quite a lot of impact from weather on both Australia and Indonesia, which further helped to reduce the discounts on the lower-quality coals. And then as far as Australia is concerned, you may have noticed that the Newcastle Index, the API6, has widened and has actually run quite a bit ahead of the South African high-quality index being the API4 index. And that is due to disruptions in the Australia production and logistics, but also the lack of Russian coal going into specifically Korea, Japan that is -- that hasn't implemented a hard ban like Europe on Russian coal, but made it very clear that they are not encouraging anyone to continue to import Russian coal. So we see quite a tightness in the Pacific on high quality coals. And with the Australian situation not really improving, we continue to see that there is quite a premium of the Australian index to the South African index, which actually provides opportunities for us in South Africa to then go and play in the Pacific with high-quality coal. And again, the acquisition where Exxaro is very well positioned currently to go and play. From a pricing perspective, yes pricing has come down. We saw pricing come down to the $160, which did create a bit of a scare. But -- and not because of historic coal prices. But if you're in an environment where you have to [ talk coal ] to evacuate your export coal to alternate ports, then it's becoming a real challenge when the coal price go down to that level. So great to see the coal price above $200 and the premium of the discounts on the subgrades not as big as it used to be. But in general, from where we sit, we are quite positive. We still believe the Exxaro export product mix is a very competitive product mix. And we do not see any issues of selling that product mix for the rest of the year or into next year. We do accept that there is a bit of a question mark on what pricing will be, but we also believe that we will be successful in that to place our coals even at lower prices. We're working very hard to reduce the cost of taking our coal through other ports because we recognize the importance of that in the current environment. And we think we have good initiatives that will carry us into next year. Kgabi, I think that's all from my side.

Just touching on production. Our overall production is forecast at [ Siditras ] has been lower than what was previously guided, [ 17% ] lower on metallurgical coal and 12% lower on thermal coal [ ede malanga ]. The biggest contributors are the rail performance, and this was adversely [ reset ] by the recent Transnet strike and the derailment, which impacted Mafube, Leeuwpan and the metallurgical coal production. And also with the unfortunate fatal incident, we had to stop the Belfast operation for more than 20 days, and that's also impacted the production output in that operation. On thermal coal production, we expect that to be in line with the guidance. If I then move to the sales. The total sales are expected to be 3% lower than what was previously guided, with the export sales for [ Kazat to be 6% ] lower. Our Mpumalanga domestic sales expected to be 17% lower and metallurgical also expected to be 17% lower than what was previously guided. The major impact is still the rail performance, which was mitigated through using road transport and alternative port solutions. Our Matla mine performed well. [ You ] need to expect that to increase sales by 1% from the previous guidance. We have embarked on capital excellence [ chain ] to drive the efficiency of [ our [ itipro ] capital. And I'll ask Mellis to take us through that, and we are measuring industry that we started in the third quarter of the financial year [ and it can tell excellence ].

Thanks so much, Kgabi. I think we're quite pleased with the progress we've been making on the capital expense journey, and we're starting to see the benefit showing through in our numbers. Constantly optimizing, making sure that all the projects comply with our rigorous standards and [ keep our eyes heavy force ] through the investment decision. So we are about 490 million down from our previous guidance. And the bulk of that is in Waterberg, where we're looking at our truck and shovel replacement strategy, really stopping to [ smooth ] out now, and we're making the timing decisions a lot better. There's about [ 90 ] million that we're down in Mpumalanga, and it's a combination of Leeuwpan and Belfast. And then the GG6 project coming in at a slightly lower number than before at about 130 million down from the previous guidance. The project is completed by the end of December and 2023, we'll see the first full production at 1.7 million tonnes out of that plant. So really pleased with where we're going and closing out the year very strongly. Thanks, Kgabi.

Thank you very much, Mellis, and to the team for that overview. I think, Irene, we can now move over to questions and answers.

[Operator Instructions]. Our first question is from Nkateko Mathonsi of Investec. Apologies. We've lost the line on Nkateko. Our next question is from [ Anil Tiat ] of Optimum Investment Group. It's seems there is no response from that line. [Operator Instructions] We have a question from [ Singh Forsman ] of [ Kima ] Securities.

I was recently [ chatting ] to a geologist and CEO of an Australian company that focuses on copper. And they were saying that obviously, the European winter now is going to highlight some of the energy shortages. And there are going to be quite a few blackouts and stuff. Do you think that's going to help your case? I remember last time, copper wasn't really 1 of the 3 commodities that you were focused on expanding into.

Okay. So your question is the -- energy situation in the U.K.

Yes. Do you think the energy shortages in Europe this winter will help you? And are you guys looking at copper?

Okay. So there are 2 questions there. We'll start by responding to the first one on coal and energy and then come back on the copper.

Yes. Thank you. Sakkie here. So on the energy security side, we do not, from our view, think there are imminent energy security risks in Europe, but we do foresee that towards the end of the winter, the European winter, we're going to see certain stocks are running low. There is also specifically in a country like Germany, a decision taken to limit the amount of gas flow that they will allow during the winter just to safeguard the stock, to ensure they don't consume the gas that they have in stock early part of the winter and then [ stuck with ] a problem. So I think all of this on balance should support the whole energy complex, whether that's oil, whether it's gas, or whether it's coal. There is a limitation as to how much coal Europe can burn because they have decommissioned quite a bit of the coal-fired power stations. But we also do believe that for those coal-fired power stations that they do have, they will definitely continue to run them very hard. Gas for the first time now in quite a few months are again cheaper to generate electricity from in Europe versus coal, but they need both. So we don't fear that they will stop the one in favor of the other. So yes, on net balance, I do think any energy shortage or security issues is good in general for the energy complex and definitely also for coal.

On the second question, it's [ Mokshwano ] speaking here. So yes, copper is indeed one of the commodities that we're looking at. As you would remember, in the Capital Markets Day in 2020, we announced 3 commodities that we're looking at, copper being one, manganese being the other and bauxite being the third.

Awesome. I might just point out you guys might be interested in early January talking to Michelle McLean who is an ex Miss Universe, but she's, because she's from Namibia. She's a Namibia investment representative. And they've got some coal assets there, and they've got access to other coal assets -- sorry, copper assets also.

All right. Now thank you very much for that reference.

We have a question from [ Anil Tiat ] of Optimum Investment Group.

Can you hear me now?

Yes, we can, Anil.

Okay. Sorry for the inconvenience earlier. Just on the export coal that's trucked out of -- trucked to other ports. What percentage of the exports is truck versus the percentage rail? And what's the incremental costs relating to being trucked compared to just rails to the [ port ]?

Yes. Anil, so if you look at our guidance for the total exports of this year of 5.2 million, then we think, at best, 4.7 million tons of that will be moved to RBCT by TFR. And that is compared to a initial figure of about 5.3 million when we spoke to you in August. So quite an impact there. We lost more than 0.5 million tonnes of railings to RBCT through the impact of both the strike and the derailment. So we think at best 4.7 million there, and then we do think about 0.5 million tonnes through the other ports that we export. So there is your ratio. And then as far as the cost is concerned, we have indicated also in August that it is much more expensive. And it depends through which port you go and whether you have access in the port or not, or whether you have to use someone else's capacity in port. The cost differential from -- let's say from Mpumalanga mine through TFR and RBCT compared to these optionality routes can be anything between 4x and 6x more expensive than through a TFR and RBCT. So it is quite expensive.

Our next question is from [ Cole Besilius ] of [ Orbita ] Capital.

Can you guys hear me?

Yes, we can.

Perfect. I've got a related question with regards to the cost of trucking to the port. I just want to understand the back -- where the handling cost at the ports given that a lot of the ports are now focused on coal, has that handling cost gone up for the back of port providers and the port itself? Do you -- is it maybe a value-added service charge that they ask instead of maybe $8 a tonne, now it goes up to $15 a tonne given where we -- given the urgency of exporting coal and obviously the demand? Can you just guide us rightly according to that? Not that reaches the coal terminal, but the other ports specifically.

Okay. [ Cole ], is that your only question? Do you have any other questions beyond that?

That's my only question. My other questions were answered.

Yes, Covis, thank you for the question. As much (sic) [ Inasmuch ] as we are not going into the detail of these differential cost between ports and logistics options, the principle that you put on the table is very clear, is costs have gone up, that we are charged by -- through these other ports, specifically [ Transnet port ] terminals, the costs have gone up. And yes, that definitely contributes towards the cost, whether you go directly through the key side with import stock capacity or whether you have to go back of port with double handling and sometimes triple handling. In all respects costs have gone up.

Our next question is from Nkateko Mathonsi of Investec.

I actually -- I'm sorry about last time. Technology failed me. I have -- I think I have 2 questions. The first one is actually on prices. And I want to know if you're able to give us a bit of an indication on the price achieved or the discount to API for in the second half of this year or up until right now? And also, I think the one thing I also noticed on the report published in the morning is that you are selling domestically, but then it ends up in the export market you're [ selling ] to those that have capacity for export. And I want to know if you are able to sell it at some premium even though you're selling domestically. If there's any link to the export prices on that quantity that you're selling domestically, but for the export market?

Okay. Great. Thanks a lot for those questions.

I also have another question. Do you want me to say all my questions and then I can keep quiet? I also wanted to know in terms of Leeuwpan and the divestment that has stalled. What were the key issues? And when do you expect that process to actually get underway again? And then I think it also would be helpful on an ESG front for you to share a little bit in terms of the learnings related to the previous fatal incident. What were the learnings that you have actually implemented going forward? Those are all my questions.

Thanks, Nkateko.

Thanks, Nkateko. Yes, at this stage of -- during the [ if we ] pre-close, we are not going into the financial side of the business. It is more on the operational side that we give the market some guidance. So I think on the pricing side, you can very easily -- if you subscribe to any of the price providers, you can get the -- what the price movements and also the discounts on the subgrades are. I think that's generally available information on subscription that most [ in those ] groups do [ air ]. I think if we talk about the price realization, again, percentage price realization is something we will talk to the market by the time of results announcement, as we normally do. And then on your question regarding the local sales, what we call the FCA sales. So it's that product volume that we, in normal circumstances, will have exported ourselves through Richards Bay. But because TFR is not performing, we either try to sell that now through other ports or through other players that have access to other ports. So yes, in short, the answer to the question you asked, we definitely try to get the best price on that and not a domestic price. So we are definitely making a calculation to say, as this product will be going to the export market and you do allow the margin for the third party who's buying it from you, and [ we'll ] get it through other capacity out to try and push to at least have export-related price on your FCA sales and not just a normal domestic price. And I think we've been quite successful in that in this year so far. But again, the -- apart from the normal cost of what we call optionality through the other ports, you now have other players in the mix as well. So yes, it does impact on the price that you do get. But yes, definitely better than the plain domestic price. We're just going to talk to the Leeuwpan issue as well.

So yes, on Leeuwpan, we made good progress on the disposal earlier in the year. And I think then -- now that was also the time when for instance, the TFR issues arose. And due to those issues, it became more problematic to get the transaction to move ahead. And then the decision was taken to stop the process at that point in time and to look at the stability of the business.

And maybe to add, Nkateko, in terms of when the process will kick in, we would not know at this point in time, as Koppes has said, when you've got these long periods of time of uncertainty to employees, you do lose a bit of focus and traction in the business. And as soon as we pick up that there is traction, and we also look at everything else that may have happened around the mine, and then we will definitely make a call. And we do that every year in June during our strategy session. So we will obviously look at it again going up to June of next year. After that, then we will definitely announce if there's anything that triggered that process to be in line again.

On the lessons from the fatal, maybe just to give context, the fatal happened in a parking area where we park our trucks. For us, the learning data around the technology where probably we can see how do we remove people who exit their machine. And this is an ongoing issue in the mining industry. I think last month -- in the last 6 weeks there have been 6 fatalities into trucks interacting with people. So we're still working as an industry in terms of what technology we can implement. But also for us, also the issue of mental awareness and how do we understand and know where people are in terms of their mental speed. So that is what [ we have pulled from that ].

The next question is from Thabang Thlaku of SBG Securities.

I have questions largely related to Transnet. So I'll kick off with the first one, which is operational, now being cognizant of the fact that this is not a financial update but rather an operational one. I mean, Exxaro is one of the best cost performers in the SA diversified market. Are you guys able to give us an indication of what your inflation levels you apply relative to 2022 where we -- you probably still did well. But obviously, it's been 6 months being in an inflation environment and some [ Africa is ] getting worse. So that's my first question. And then the other 3 questions are around Transnet now. You guys said that one of the reasons disposing LP has been difficult is due to Transnet. Now I remember you guys saying that you weren't going to dispose it with the capacity. So is it more of a sentiment issue, where a new buyer is perhaps concerned about the ability to get any capacity from Transnet, but not related to Exxaro? My third question is, at the beginning of September, [ Mispush at Derby ] announced that they had completed the legal -- they had concluded the legal issues they had with CRRC and that CRRC would be sending technical experts to South Africa to start with maintenance, but there clearly hasn't been an improvement in the availability of [ locals ] since then. Do you guys have any color on that? Are you feeling a little bit more optimistic going into 2023 given that you sort of put out numbers of 60 million tonnes? I'm not even sure if it's for the 2022 calendar year or the '23 financial year for March [ next ending ]. And then my last question is a little bit philosophical. So I apologize, but it's understandable that a lot of coal exporters in South Africa are moving towards tracking, because there's lost opportunities. But we also know that tracking is suspected to be one of the reasons TFR is underperforming because of the vandalism. How do you guys view that? And as coal prices come down, do we see tracking reducing drastically, say in 2024 when coal prices are no longer around the $200 level? So quite a mouthful, but I'll leave it there.

Thanks, Thabang. Appreciate the question. And I think I'm going to start with the last one first, Sakkie on this side. So maybe the tracking one, the philosophical question you're asking, it is a bit of a concern to us because if on a systemic basis, you lose capacity with TFR to the extent you have now, it does mean you enable a trucking economy where a lot of companies and people will create vested interest. And you must expect that one day, if you start to take that demand for trucking away, we want to move back to rail. It may not be that's such a smooth process, even that there is clear indication currently that some of the [ cable theft ] and vandalism we see on the coal line, we believe is related to some of these very things you have mentioned. Just to give you an indication, most of the cable theft that we witness is on the main line. And you must ask yourself if people really did it for the copper, for the cable, why didn't they go to the branch lines that are much quieter where they can do it unhindered, but they come to the coal line where the surveillance and everything is at much higher levels. So is it then really only about the copper? Or is it about also making sure that the coal line does not operate as we wish? So I unfortunately don't know the answer, but it is a concern to us maybe on a strategic level. Then going back to the issue of Leeuwpan. So on Leeuwpan, you're very correct. We -- the plan was never to divest of Leeuwpan or any of our other assets with export capacity, being that rail or port. So it was not part of the transaction. But as much as we are not selling some of our capacity with the assets, whoever is buying the asset must still evacuate that coal if they want to export that. And therefore, it is important that any of them who will be the new owner of that asset, they must be able to secure Transnet rail to that asset. And that was the concern with Transnet at one stage indicated that they do not want to service what we call the small siding. So it's the sidings where you allow the times only on 6,000 tonnes and not on 8,300 tonnes. We have resolved that with TFR. We do get weekly allocation on a planning basis to the times that we can get given the current level of performance, and that one, I think, has now been resolved. Then the other question you asked was on...

[ she mentioned the locals, the availability ] the deployment of CRRC.

Oh yes. Thank you very much Yes. So the indications that we get from TFR is that there was an in principle agreement reached with -- between the Chinese and Transnet on the outstanding matters that has led to the legal action that we saw. And the in principle agreement was an agreement that said, yes, in principle, the Chinese will start to supply spares to Transnet again. But we must understand that the difference between an in principle agreement and a definitive agreement where you're actually, on the strength of which you actually do get the spares, do take quite a bit of negotiation and that has not been concluded. Latest indications is that TFR hoped to have that concluded towards the end of the year if all goes well. But what is positive is that as much as that we are not aware of new spares coming into the country from China yet. What has happened is that some of the spares that were in South Africa, but in bonded warehouses due to the legal action, was being released in the past month. And specifically regarding [ compressions ] where TFR now is able to make use of some of those space that were in bonded warehouses. So there is movement. But the big jump that we want to see in terms of spare availability, we actually expect only in the -- hopefully, from the first half of next year once the agreements were concluded.

Excellent. Thanks for that comprehensive answer, Sakkie. I don't know if it's Riaan or Mellis, any indication of like what your inflation increases are looking like?

Thanks, Thabang. It was a question that you probe us on, and I think it's rightly so. We've given the indication that -- we constantly give indications that we'll stay within mining inflation. I mean, obviously, we won't give a number now. But I mean, we can just look at what the PPI is for this current year for South Africa, which is around 13%. And we're working hard at still remaining within that. We think there is more pressure in the second half. I mean we've also got the logistics cost that we're picking up additionally to what we've -- what the numbers were in the first half. So inflation pressures are increasing, but we're still guiding to remain within mining inflation.

We have a follow-up question from [ Singh Forsman ] of [ Pima ] Securities.

Sorry, I just thought I'd mention that when you were talking earlier about fatalities, some of the [ packing ] companies use and some of the [ goal ] which is quite useful. There's a company called Delta Dirt, which send drones in to check out -- to help the security rather than send people in, which is probably a lot safer, when you're talking about people around the trucks and stuff. Maybe you can use drones?

Okay. Thanks [ Bret ].

[Operator Instructions]. It seems we have no further questions, sir.

Thank you very much, Irene, and thank you very much, ladies and gentlemen, for joining us and for your continued interest. Our year-end is, yes, end of December 2022, and we will be releasing our results on Thursday, the 16th of March 2023. We'll obviously communicate details closer to the time. Thank you very much and wishing you all a safe and happy festive season, and we look forward to seeing you again in the New Year. Thank you very much. Thanks. Bye.

Ladies and gentlemen, that concludes this conference. Thank you for joining us. You may now disconnect your lines.