Fibra UNO (FUNO11) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Fibra UNO's Fourth Quarter 2022 Results Call on the 23rd of February 2023. [Operator Instructions] The format of the call today will be a presentation by the management team followed by a question-and-answer session. So without further ado, I would now like to pass the line to Mr. Andre Elman, the CEO of Fibra UNO. Please go ahead, sir.

Thank you, Michael. Thank you very much. Thank you, everybody, for listening to us to our quarterly call regarding last quarter of last year's results. I'm very happy to deliver the results that we delivered yesterday. We are all very excited at the company. And we think that the company has a bright future ahead. As you know, we are a diversified company, and we feel that this diversification is paying off and will be paying off in the near future. We see for Mexico a huge opportunity and everybody is talking about nearshoring, I've said before that nearshoring is just a term -- and I don't even know what it really means. But I will talk about that in a couple of minutes. If you allow me just to say that the future that we see for the company comes from every single angle of the company. We have been taking care of all the aspects of the company, including responsible management of the liabilities. And we know that we have a bit higher rate for the longer term that we have our debt, but we feel comfortable about that. We know that we have been receiving the blows of the higher rates in the last 6 quarters, but we have endured those. And we will continue to endure whatever the market present for us. We will see that the company is designed to be defensive. We will continue to deliver the results, and we will continue to deliver good dividend for our shareholders. Now as for the nearshoring, I am very happy to say, and I would not like to sound to brag about, but we are in the best shape to receive whatever the nearshoring throw at us. We have the best opportunity. We are the largest player, and we are the more relevant and predominant player on the sector. We will continue to be, and we will continue to capture the opportunities. We have firsthand in most of the opportunities in that particular sector. Just to remember that our sponsor, our family founders have granted us our right of first refusal on every single property they own and they believe me, they own a bunch. So we have the possibility to seize and to capture and to acquire those properties in the near future. There's not a lot of land suitable to be developed immediately. We have the opportunity to seize those particular pieces of land, which, in my opinion, and just, again, not to brag I think that we are the most and the best qualified to have an opinion about this because we are the largest and more dominant player in the market. I think that we will see those opportunities. We have the grant, and we cherish that grant. Now how will we finance that? That's a whole other ball game, and we will address that as we have been addressing all of our growth in the last 12 years. I've said many times before that we are here for the next 50 years. Believe me, we will be here for the next 50 years. And we will capture the opportunity of the nearshoring. We are the best-in-class in that sense, and we will have first-hand on the best opportunities of the country. We have received a lot of interest from many parties, different companies coming from the Far East, coming from the Middle East, coming from, of course, from the U.S. and our partners in Canada and also from Europe, to have new space in the industrial side. As you know, there's a lot of restrictions in the border states in the border cities because of the lack of energy, because of lack of security, et cetera, et cetera, et cetera. We will capture the best of those opportunities. We have access to the best pieces of land, and we will continue to grow our industrial footprint in the company. Aside of that, I just want to let you know that it's not only about nearshoring. The nearshoring is just the entry point. Every single company that will come, and we will provide the space for them will eventually need space for the retail. Will eventually need space for the office, corporate, will eventually need housing for their employers (sic) [employees], schools for the employees and also hospitals for the employees and retail centers for their employees. It's a chain that nobody can stop. We think that we are in good shape. The company is in a extremely good shape, and the country is in a good shape to capture the opportunity. I think I've said enough about nearshoring. We will capture the opportunity and our numbers will show it in the near future. I will let now Jorge talk about the particular on the numbers if you allow me. Jorge, please?

Thank you very much, Andre, and thanks, everybody, for joining our fourth quarter '22 results call. As usual, I'll go into the quarterly MD&A, which starts looking at our P&L account. In that regard, Funo's total revenues increased a remarkable MXN 213 million to reach MXN 6.2 billion. That's 3.5% above the third quarter 2022, and I'd like to highlight that this is a remarkable annualized growth rate of 14% quarter-over-quarter. That is no small feat for a company of our size, diversified, as Andre mentioned, in the different segments in which we are. Of course, industrial is a hot market, but we're also seeing, as we've mentioned before, recoveries in retail, and we've seen the initial trend in recovery of occupation that we have been talking about. In office we recorded an increase in occupation. We'll talk about this in a little bit. But I did want to highlight that we saw a total revenue increase of 14% annualized. That is a very remarkable number even considering the high inflation environment in which we are. So we're very pleased with the performance of the company in this regard. Going into the details of the drivers for that growth, obviously, an increase in gross leasable area of 50 basis points compared to the previous quarter. Rent increases from the pass-through of inflation in our rental contracts. We also saw rent increases on some lease renewals. I'll go into detail in a second. But as we mentioned, the trends that we have been discussing in the last few quarterly calls remain intact. The initial contribution of some projects that were under development are now in operation. And this was offset by a peso-dollar exchange rate depreciation, which obviously has a negative effect on the U.S. dollar-denominated rents. And also, this was offset slightly to a less extent by the sale of property that we recorded during the quarter. The industrial property portfolio that we sold during the quarter. In terms of occupancy, the portfolio reached 93.7%, which is 50 basis points above the previous quarter. We have very solid occupancy numbers to discuss. The industrial portfolio increased 40 basis points to reach 98%. The retail portfolio increased 70 basis points to reach 90%. The office portfolio increased 180 basis points to reach 76.8%. And the Others portfolio remains stable. I'd like to highlight, obviously, the office sector increase that we have been discussing for many quarters. Of course, we understand that this is a market that has been under pressure, but we expected to see first occupancy gains then followed by increasing rents, and that is exactly what we are seeing. We saw an occupancy gain and the rent in office remains pressured to stable. So the property portfolio is operating exactly as we expected. In terms of operating expenses, property taxes and insurance, total operating expenses increased MXN 146.7 million, 22% from the previous quarter, which has a combination of effects obviously, inflation in the -- or above inflation rather, increases in certain operating expense lines as well as some expense seasonality. We don't expect to see -- to continue to see 20% increases in expenses every quarter. But this quarter was extraordinarily high on the expense side, we expect to see something more normal going forward. Property taxes increased by only MXN 0.5 million for [ 0.3% ] basically by the addition of new square meters that were under development and are now in operation. And insurance expenses closed at MXN 96.9 million, basically stable against the previous quarter. As a result, of all of the above, our net operating income increased by MXN 87 million or 1.8%, 6.2% annualized to MXN 4.8 billion. The NOI margin calculated over rental revenues was a healthy 86.6% and 78.2% against total revenues. In terms of interest expense and interest income, our net interest expense increased by only MXN 56.7 million or 2.6% compared to the third quarter of '22. This is mainly due to a combination of factors, an increase in our debt by MXN 1 billion and $45 million. Increasing the variable rate based -- the base rate for a variable rate debt as you are all aware we continue to have been operating, and as Andre mentioned in the initial remarks in an environment where we have a higher interest rate set. The exchange rate appreciated from MXN 20.30 to MXN 19.41. And obviously, this affected -- had a positive effect on expense. And there was an offset from [indiscernible] for the early cancellation linked to the Vermont portfolio that recorded a MXN 172.1 million profit. This is a one-off that won't be repeated. As a result of the above, our funds from operations decreased MXN 26 million, minus 1.1%, reaching MXN 2.25 billion. The adjusted funds from operation or AFFO increased by MXN 331 million or 13.2% compared to the third quarter of '22 to reach MXN 2.85 billion, which is mainly due to the sale of the 16 properties from our Vermont, Maine, California and Titan portfolios as well as some industrial land back that had come with the Titan portfolio. On a per CBFI basis, FFO and AFFO during the fourth quarter of '22, we did not repurchase or issue CBFI. So we closed the quarter with a same MXN 3.779 billion outstanding CBFIs. And on a per CBFI basis, FFO was MXN 0.5952 and AFFO was MXN 0.7534, respectively, which imply an increase of 1% and 13.3% compared to the previous quarter. Now moving to the distribution. I would like to take a little bit of time to provide a little bit more detail and explanation to our record distribution for the fourth quarter. As you know, on February 2, we announced a record high distribution of MXN 1.1068 per CBFI to reach the 95% minimum net taxable income required by law, which would be MXN 10,252 million. The total amount that we had distributed as of the third quarter of '22 was MXN 6,025 million. The remaining amount needed to reach the 95% minimum net taxable income was, therefore, MXN 4.22 billion. Now I'd like to step here and say that arising from the asset sales that we recorded during 2022, not the last 13 property portfolio that I mentioned, but the Los Saucitos II that we sold earlier in the year, we recorded MXN 150.1 million in profits correspond to Los Saucitos I and II. This required Fibra UNO to pay income tax due to the fact that those properties were sold before completing the minimum 4-year holding period in our portfolio. Therefore, Fibra UNO paid MXN 45 million of net income taxes on behalf of our CBFI holders. As a result, the net cash payout distribution that we delivered and announced on February 2 was MXN 4.182 billion equivalent to MXN 1.1068 per CBFI. Now out of those MXN 1.1068 per CBFI, 100% corresponds to fiscal results, there is no return on capital calculation this year. This distribution, as we mentioned, will be paid in 2 installments. The first one already occurred of MXN 0.9514 per CBFI. That happened on February 10 and the second payment of MXN 0.1554 per CBFI will be paid on March 15 of this year. I'd like to also highlight that the property sale from the Vermont, Maine, California and Titan portfolios for MXN 205.5 million that I mentioned above was not part of the fiscal result of 2022. This will be included in the 2023 fiscal result calculation. And lastly, I'd like to highlight that our ability to pay the dividend with our own resources is a show of strength in the cash flow generation of our company. Moving to the balance sheet. The accounts receivable for the fourth quarter '22 totaled MXN 2.8 billion, an increase of MXN 84 million, 3% above the previous quarter. This is mainly due to the normal growth of the business, which resulted in increased invoicing. In terms of investment properties, I would also like to highlight that despite the high inflation, high replacement cost, higher comparable transactions, especially looking into our own portfolio, which we have been selling at an average of 25% above the asset value that we have. We only increased approximately 3%, the fair value adjustment of our properties in the whole year. During this quarter, we increased only 1.7% compared to the second -- third quarter of '22, which was an increase of MXN 5.2 billion. Fair value adjustment, as I mentioned, is mainly due to high inflation environment and its effect on the net present value of rents, as well as increase in replacement costs. And as you know, during the fourth quarter of '22 and the fourth quarter every year, we have a third-party independent appraiser value our property. So this is a result of that valuation process. The effects on increasing property value also includes the normal progress in construction and process under development, CapEx invested in our property portfolio, and it was obviously offset by the sales of our Vermont, Maine and Californian and Titan portfolios. Our debt during the fourth quarter of '22 equaled MXN 140.4 billion compared to MXN 142.8 billion in the previous quarter, a reduction mainly due to the prepayment of a mortgage credit line for MXN 4.1 billion prepayment of an unsecured credit line with BBVA for MXN 500 million, which is the refinancings that we have discussed before. Prepayment of the FUNO-15 for MXN 15.6 million, a net increase in bilateral lines of credits for MXN 1 billion and $45 million and the effect of exchange rate valuation, which went from MXN 20.3058 to MXN 19.4143 per dollar. The peso continues to be very strong and is appreciating. Total equity as a result of all the changes that I mentioned above, increased by MXN 11 billion or 6.3%. Basically, net income generated by quarterly results, a revaluation, the shareholder distribution and also the effect of the employee compensation plan provisions. Now moving to the operating results on the leasing spread front, I would like to highlight that nominal increases in peso-denominated contracts were almost 12% for Industrial, 11.7%, 8.8% in Retail and almost 2% higher in Office. Obviously, when compared to inflation, we recorded 390 basis points in industrial, 100 in retail and minus 590 in the office segment. So consistent to what I was describing above and to the message that we've had for the last few quarters. First, we would see a gain in occupancy in the office sector. And then after that, we would start seeing recoveries in the rent. So as you can see here, the rent remains flattish in nominal terms. For dollar-denominated leases, we saw 680 basis points in the Industrial segment, 540 in retail and 310 basis points in the office segment. So all of them positive increases considering dollar inflation, it was slightly negative for industrial, 2% down in retail and 430 basis points down in office segment. Again, the same narrative that we have been discussing for the last few quarters continues. In terms of constant property performance per square meter increased a nominal 4.3% compared with an average inflation of 7.83%, which looks like a net decrease in real terms. This is mainly due to the appreciation of the foreign exchange effect in our dollar contracts. And obviously, as you know, there's also a slight lag in the pass-through of inflation for our contracts. Lastly, at the subsegment level, the portfolio's total rent per square foot increased from 10.9% to 11.1% or 1.6% quarter-over-quarter, which again is almost 6.5% on an annual basis, which is almost in line with inflation is mainly due to increase in both current contracts, some renewals and again, offset by the FX appreciation. The total NOI at a property level for the quarter increased 3.7% compared to the previous quarters, variations mainly due to the following: Industrial, Logistics [indiscernible] 3%, Light Manufacturing decreased 1.7% mainly due by -- because of the depreciation of the currency business parts was plus 3.9% decrease in logistics and was due to some extraordinary one-off income during the third quarter of '22 that did not exist in -- for '22 as well as the FX appreciation. And in light manufacturing decrease was mainly to the FX. In the office segment, we saw an NOI increase of 3.4%, mainly due to the occupancy gains. In the Retail segment, we saw solid performance with standalone increase of 5.6%, regional 5.3%, Fashion mall increasing 10%, mainly due to occupancy gains as well as we have mentioned before, inclusion of variable rents. The other segments, NOI grew by 14.3%, mainly due to seasonal increase in variable rents. And with this, I conclude the discussion of financial and operating results, Michael, if we can please open the floor to Q&A.

[Operator Instructions] Our first question comes from Mr. Javier Gayol from GBM.

Yes. And I have just 2 quick ones. The first one is related to the fiscal results at the 95% that you guys paid as you very clearly explained why the extraordinary [indiscernible] . If you could -- I know it's difficult to say it's early on, but if you could tell us how would that fiscal return or fiscal results look for 2023, the inflation maintains and the FX sustains at the current levels? That would be very helpful just to sort of understand and better where the figure might be for the year. And my second question is related to as you guys mentioned, you are very well positioned to increase your footprint in industrial and you're very well positioned to gain from the near showing momentum. Just I think you mentioned it throughout the call that the issue or how to fund this growth is, I think, the main question here. So if you could just maybe give us some color as what sort of schemes are you thinking to participate? What size of properties or what size of investments are you looking for the year that relates to nearshoring? That will be super helpful.

Sure, Javier. Thank you for the questions. First, on the fiscal results, I wish I had a crystal ball to know, in particular, where the FX is going to finish the year. That is, I think, the key difficult element to plan for. I think we all know that we are in a high inflationary environment. That's why we have high rates. And it's -- inflation always is sticky once it goes up. It's more complicated to bring it down. The expectation, obviously, is that inflation will be eventually lower than it is today but it may remain high and that has an effect on increasing our net fiscal result. The question is, will we see a depreciation of the FX or not. [Audio Gap] mine. I don't think that we know exactly where the foreign exchange is going to end. There should be a depreciation of the currency, but we have seen a lot of volatility. So since we're not in the business of making predictions, we rather are always being cautious. It's very difficult to give guidance. And that's why, in particular, we're shying away from giving specific guidance on what the payout is going to end up looking at at the end of the year. So I think that what -- the focus that we should be having or we have as a company is on targeting what our NOI should be, which means making sure that we pass through inflation, that we renew our contracts, that we have our expenses in check, et cetera. And that is going to be the main focus of the company. Now regarding the second question as to the opportunity to grow and take advantage of the nearshoring. Andre mentioned at the beginning of the call that fortunately, for Fibra UNO we have received from the sponsors of Fibra UNO, a right of first refusal on all of their property that is suitable for Fibra UNO. And this means the warehouses that the group has privately, that potentially could be transferred at Fibra UNO. How big this could be? It could be doubling the company. It could be even in tripling the company if we take advantage of everything. And the key to this is obviously that nobody else has access to that land. And we are, as you know, focused on the logistics segment, which requires land. If you're going to do light manufacturing, it's a little bit less tricky. You can have access to land a lot easier. But for logistics, you need a well-located land and nobody has access to that land. That is something that the group has. It's a very big, big opportunity for Fibra UNO. How and when to capture it, I think is going to depend a lot on moving pieces that I don't think we can discuss at this point, but the good thing or the good news is that that right of first refusal is already something that puts it, let me put it this way within the Fibra UNO ecosystem, which is -- we are the only ones who are able to access that growth, whether it's this year, in 6 months or next year. It always going to depend on a lot of different moving factors. But it's the opportunity -- we are the only ones who have that opportunity to grow in those locations.

[Operator Instructions] The next question is from Mr. Gordon Lee from BTG.

I have just -- I had 2 questions, but I'll limit it to one. Andre, I was intrigued by the comment that you made in your remarks on thinking about nearshoring not only being a phenomenon that benefits existing industrial centers, and you mentioned the example of Progresso, right, as an opportunity in Yucatan. And my question is, you mentioned you're speaking of dozens of companies constantly, some of whom are in Mexico, some of whom are not. When you have that conversation with potential tenants in terms of maybe considering other areas, what's their reaction? How much traction is there to that idea with the tenants?

There's a lot of traction as long as they have the infrastructure. When I talk about Progresso, I remember saying that if we manage to invest in infrastructure in our ports, you will have a ship getting it from Mexico to New York in 48 hours. There's no other place in the world that has this advantage. So for us, that means that we need investment in infrastructure. That doesn't mean that we are going to invest in infrastructure. That means that we need to push our government to find investors for our ports, [indiscernible] and Progresso. This will bring an exit gate for Mexico that you wouldn't believe for all the eastern coast of the U.S. But when you ask or you present your potential tenants with a new particular spot in our whole country. As long as you have the infrastructure, you will have in that parts -- those parts of the country, you will have a lot of jobs -- labor, a lot of labor. And maybe you will have a bit of discount in the different properties because of the price of the land is cheaper than the land in Monterrey. That's the reason why if you have a factory in Monterrey, you can easily move it to Nogales. It's basically the same for them. And they don't have the necessity to have a real estate value on the property. I mean they, the developers. For us, it's different. We need to have real estate value in our properties. So if we find out that our government is finally opened the door for new investment imports, and we can access land just adjusting to the port. That land still has a lot of real estate value. So I think I'm talking about different things, but what we're seeing today is the companies that are coming, they don't really care about being a 1-hour drive from the border. They need to be where the infrastructure is. I don't know if I answered correctly, Gordon.

Next question comes from [ Mr. Johan Ponsse from Bradesco BBM ].

Somewhat similar to the previous one. I would like to hear your opinion on Tesla's potential investment in Mexico. We recently saw a news article that mentioned T-MexPark as a property that Tesla may be interested in, which to my understanding is owned by E-Group. So any additional color you can give here would be great.

Yes, we have received the interest from Tesla, not this couple of weeks ago, but a year ago. Tesla wants to buy the land. We are not in the business of selling land, I mean we will sell land if it's the only -- the ultimate resource. But we would like to lease now. What will happen if somehow we get into an agreement with Tesla? What will happen with Tier 1, Tier 2 and Tier 3 suppliers of them? Those are very interesting for us because we can develop a lot of square meters of industrial space for them to serve Tesla, which we will be the primary client for them. So we still are in the negotiations. We are -- we don't want to sell, but if it comes to sell and then develop for the rest of the suppliers, we will do that. Actually, we will develop anyway with or without Tesla. I think the location is great, and the location will be great for many, many, many years.

Our next question comes from [ Renata Sabra ] from Citigroup.

My question is regarding the Alios co-investment that it seems to have a first phase and soon -- is the plan to purchase your partners? And if so, what would be the ticket size of the purchase?

Well, as you know, the CKD that we have with the authorities has an extension option. And we are currently in discussions and negotiations with the authorities to decide what is it that we want to do? Remember that we have Phase 2 of Miticah that could still be developed or we could opt for exiting the vehicle today or the authorities could offer exiting the vehicle today. There's positives and negatives to both scenarios for the authorities and for ourselves. So we're in negotiations with them, and we haven't made any final decision on the matter. As soon as we have something official to communicate to the market, we will communicate it to the market. At this point, we're still in negotiations.

And we are always open to welcome new ventures like those, especially if we are going to develop.

Our next question comes from [ Mr. Gisselle Galvez ] from Principal Financial.

We saw that the rating [indiscernible] Fitch yesterday to BBB-. We would like to understand what would be the strategy to execute going forward since rating agencies are mentioning that in order to take advantage of Nearshoring, further acquisitions must be made, maybe at a slower pace. So under this scope what would be your expected CapEx and development and acquisitions for 2023? And with this in mind, could you also give us some idea on the level of asset sales expected for 2023 and the amount that must be paid for Miticah in 2024, maybe?

Thanks, Michel (sic) [Gisselle]. Regarding the future of where we're headed as a company today from a credit point of view, if you put the brakes on [indiscernible], which is basically where we are today in terms of not issuing more debt, not issuing more equity, this company becomes a huge cash cow. That increases its cash flows year after year with inflation, which is compound interest. And at the end of the day, that dilutes the amount of leverage that we have on its own. If you just leave the company as, let's call it, a widows business. That rating should take care of itself in the not-too-distant future, especially since we have high inflation and this is becoming sticky. That is not a thing that we like, but it benefits our business. Inflation, it's our ally. So if you leave the company alone on its own, it will delever to the point that we will be well inside of the rating guidance that companies have. Now if we want to take advantage of growth opportunities, we have to obviously access sources of capital, and this is not rocket science. There's 3 sources of capital that we can have: debt, equity or recycling assets. And it would have to be in order to take advantage of those opportunities, something quick. Now the good thing that we have as a company is that if you want to look at it this way, E-Group has worked as an incubator for Fibra UNO. Ideally speaking personally for Fibra UNO, I would love to have all that land inside the company. Unfortunately, the market doesn't pay for land because it doesn't generate cash flows but that land is super valuable. Fortunately for us, E-Group has been able to buy that land over the years, and now we are sitting in a position where if the right set of factors combine themselves, we can access those growth opportunities like the T-MexPark that was being discussed. Having said that, we are very mindful of and as Andre mentioned in his initial remarks, we want to be very prudent with our leverage. That's why we have an average life that is long. That's why we have issued 30-year bonds. We know that's expensive. We know it's cheaper to issue shorter-term debt. We don't want to go that route. We're always looking to extend our debt maturity profile even in a higher interest rate environment like we're seeing today because we know that this is a long-term business, and we want it to obviously be sustainable for the next 50 years. We're not concerned. Obviously, we do take care of things to make sure the results are there, but it's not next quarter that concerns the company. It's the whole future trend of where we're headed.

Just to complement what Jorge is saying, we are waiting for the equity avenue to open up. Is not only exclusively pertaining to our company. We haven't seen any placement of equity for the last 50 years [Audio Gap] country. So I think now the time has come to Mexico. If the equity door opens, I think we are going to be one of the destinations for that equity. And with that equity, we can continue the avenue of growth that the company has exploited so well in the last 12 years.

Our next question comes from Mr. Peter Bowley from Bank of America.

Just a follow-up on the Nearshoring theme regarding the East and Southeast region. Just thinking about timing, how quickly do you see Funo's industrial real estate activity ramping up in this region given the debottlenecking infrastructure need for that region? Or put another way, do you see the geographic mix of the industrial real estate footprint for FUNO significantly shifting over the next 3 years?

No, I -- thanks for your question, Peter. I think that one thing that real estate teaches us is that it's a business where you have to be patient, and it's a long term and it's more directional where we are. And I think that part of the commentary that we, as a country, Mexico today is facing a unique opportunity where we have time to do 2 things. One is take advantage of the immediate opportunity in Nearshoring where locations where you have already the northern border of the country has already taken a lot of those opportunities. It is leased at 100% [ Tijuana ], in Juarez, in Reynosa. Monterrey is trending towards 100% occupancy. So if you want to grow in industrial you have to invest in new developments. The land that E-Group owns and could potentially be the source for expansion of Fibra UNO is more in the traditional logistics corridors that we have known in and around Mexico City, the State of Mexico, Toluca maybe closer to in the case of T-MexPark is something that's close to the Felipe Angeles airport, as you probably have seen in the media. So it wouldn't dramatically shift the footprint that we have today. I think Andre's comment is correct in the sense that we need to understand nearshoring as a country, not just in the northern border. It's the whole country, and that will take a little bit of time. We have to invest in infrastructure. And with that infrastructure, you can potentially invest in the land eventually. But we first have to -- we need to walk before we run.

Thank you very much. Unfortunately, that's all we have time for in terms of questions. I will now be passing the line back to the company for their concluding remarks.

Thank you very much, everybody, for your questions today and for attending our call. If you have any additional follow-ups, you know my line and Sofia our IR director line. And Ana Karen Mora, if you have ESG-oriented questions, lines are always open to answer any additional questions you may have. Unfortunately, our CEO had to leave for the meeting today. But we thank you and appreciate your time.

Thank you very much. This concludes today's call. We'll now be closing all the line. Thank you, and goodbye.