JHSF Participações S.A. (JHSF3) Earnings Call Transcript & Summary

Good afternoon. Welcome to JHSF Participacoes webcast covering our fourth quarter '24 results. Joining us today are Augusto Martin, CEO; Breno Vicente, CFO; and myself, Mara Boaventura Dias, IRO. This webcast is being transmitted simultaneously on YouTube and Zoom and can be accessed via our website, ri.jhsf.com.br. [Operator Instructions] Before we proceed, we would like to clarify that any forward-looking statements made during this presentation regarding business projections are based on the company's management assumptions and currently available information. As such, they involve risks and uncertainties as they relate to future events. Changes in macroeconomic policies or legislation may also impact the projections. Now, I would like to turn the floor over to Augusto, who will begin the presentation. Augusto, please proceed.

Good afternoon, everyone. Thank you for joining us to our earnings conference call. This is an important call because we're going to talk about the full year of 2024 as well as the fourth quarter 2024 and our plans for 2025. If I could summarize our results in '24, I would summarize it as a year of all-time records and milestones for the company because of the advances in many different fronts that we will discuss during this presentation. The first important point is that a year ago, when I took over as CEO and did my first earnings call here with you, we said that our greatest focus in '24 would be on growing our recurring revenue business. And at the end of the year, we brought significant results in recurring revenue with also growth of our development business with important landmarks and milestones, but this shows the consolidation of our strategy. And as we said throughout the year, this shows the importance of the company diversifying its businesses, having also this recurring revenue block that would account for 2/3 of the company EBITDA at a certain point in time. And the greatest news is that faster than we imagined, the operational success of our business enabled us to achieve 63% (sic) [ 66% ] of our EBITDA from the recurring revenue business. Once again, this shows the operational success in all the businesses that we developed in this vertical and the correct strategy defined by the company to focus investments in the segment, which brought about significant results. So before I talk about recurring revenue and development, overall, last year, we achieved gross revenue of BRL 1.753 billion; consolidated EBITDA of BRL 1.287 billion, up 32% against '23; an expressive net profit of BRL 861 million, 73% above that of '23. Dividend paid to shareholders was BRL 250 million, and the development block grew reaching BRL 1 billion in revenue with the highest margins in the market. We had an efficient capital recycling. I'll talk more about that later. Record capital market transactions accessing BRL 2.2 billion with unprecedented rates. And we started to be a part of the B3 Efficient Carbon Index and participated in the World Economic Forum endeavors. Now about the recurring revenue. We had a major advance last year in recurring revenue. We exceeded BRL 1 billion and EBITDA exceeded BRL 0.5 billion. So 2/3 of our results now come from this vertical. That was faster than we imagined. A year ago, I said that in the medium and long term, we were planning to achieve 2/3 of our business is coming from this. And actually, a great part of our growth enabled us to achieve that milestone much faster than expected. And the businesses that achieved such speed comes from important performances in malls, which grew by double digits in its main indicators with the highest sales performance in the market, hospitality and gastronomy, also great growth and performance indicators as well as new operations. At the Airport activities, for the first time ever, we have exceeded BRL 100 million in EBITDA. The first airport executive transactions with international movements and JHSF Capital reaching BRL 2.5 billion in assets under management. So 2024 was a year of great milestones, validating what we said a year ago about the steps that we were planning to take. And now the company has a robust structure and a diversification of risk and businesses, which makes us a great high-end ecosystem in Latin America. Now consolidated results, adjusted EBITDA in 2024 achieved BRL 753 million, up 11% against '23 and strong growth compared to the fourth quarter of '23, up 21%. Net profit of the company with strong growth, up 73%, reaching BRL 862 million, a 94% growth compared to the fourth quarter of 2023. In addition to the growth of this number, we also had margin growth, which we will talk about later on. Recurring revenue, we achieved an all-time record of BRL 1 million in revenue and adjusted EBITDA of BRL 0.5 million. Great evolution throughout the years. As we've been saying, the company has been investing a lot in expanding our recurring revenue block. We had over 300% growth in the last 4 years, reaching BRL 1.113 billion in gross revenue. Now adjusted EBITDA. The gross revenue of BRL 1.113 billion gave us a 48% margin with BRL 495 million. So almost BRL 0.5 billion coming from the recurring revenue block. And recurring revenue now accounts for 76% of our consolidated adjusted EBITDA for 2024. A year ago, when I did my first presentation with you about our results in 2023, when I took over as CEO of the company, I talked about the focus and the interest we had in growing our recurring revenue. We wanted it to account for 2/3 of our results in the medium and long terms. Now with growth of development as well, but we wanted recurring revenue to reach this number in the medium and long term. And the good news is that we were able to do that even faster than we expected because of the success of our recurring revenue products, and we were able to achieve 66% of the company's EBITDA coming from recurring revenue already in 2024 and adjusted EBITDA margin of 48%, showing the high profitability of this business and showing that these investments have been very positive for the company. So our conclusion, when we look at this is that JHSF today is no longer just a development company. We are a major high-end group in Brazil, having developments and recurring revenue. And today, recurring revenue already accounts for 2/3 of our EBITDA generation. Now some macro numbers related to consolidated recurring revenue, strong growth of 21% in gross revenue coming from this block, 18% increase compared to fourth quarter '23. Gross profit at BRL 542 million, up 27% against '23; adjusted EBITDA, BRL 495 million, up 42% and net profit up 128%, reaching BRL 668 million, up 134% against the fourth quarter of '23. Now let's talk a bit more about our projects and expectations for '25 and '26. The relevant investments over BRL 550 million invested in recurring revenue brought us margin growth with a high return potential and a high possibility to have our assets appreciate. Usina Sao Paulo Phase 1 was delivered. Casa Fasano was opened in the third quarter of '24. Boa Vista Surf Lodge Hotel was opened in the end of '24. The new units at the JHSF residences delivered throughout the year and the new terminals and taxiway at Sao Paulo Catarina Executive Airport, expanding from the 9th to the 12th hangar and the new taxiway. In 2025, these investments will continue and part of this capital as already reflected in '25, we have the hub of offices and media already opened in the first quarter of '25. Fasano Tennis Club, which will be opened in the coming months, works completed in 2024 and Sao Paulo Surf Club, another wave pool for surfing with an exclusive technology belonging to JHSF right in the heart of Sao Paulo, [indiscernible] had the opportunity to open that a few weeks ago. And the Boa Vista Village Town Center, our new mall that will be delivered by midyear, a unique shopping mall inspired in the Hampton's in Carmel, an open mall with a mix of national, international brands; gastronomy; entertainment and so on. And due to the success of our airport, we have already started the works to expand to the 12th to the 16th hangar that will also be delivered by the end of the year. Now looking ahead, the recurring revenue sector continues to grow with Shops Faria Lima, the main mall in Faria Lima on Faria Lima and [indiscernible] corner. And we also have Fasano Miami with advanced works opening expected to happen next year. Fasano London, Fasano Sardinia and Fasano Cascais in our international expansion project and new units in the JHSF residences for rental and finally, the Grand Lodge Hotel. All of these investments together give us a consolidation in the recurring revenue sector, restrengthening the greatest high-end ecosystem in Latin America that JHSF has built. Now about the malls, more specifically and talking about the numbers of our leader operations, we were leaders in sales and rental performance in the market. Sales and stores have grown significantly. Looking at the Jardim Shops, 29% growth; Catarina Fashion Outlet, 26% growth; and Shopping Cidade Jardim growing 21%. As sales indicators, same-store sales growing 13% and same area sales growing 15%. Rental indicators, rental in the same-store growing 15% and on the same area, 17%. We are leaders in growth in this segment. Now looking at the results of malls. Gross results had significant improvement of 27% against '23. Adjusted EBITDA grew 40%, exceeding BRL 200 million, strong growth showing once again our operational success of our assets, which is a reflects of how we select the high-end assets in our portfolio. Now hospitality and gastronomy, we had evolution in indicators and gains of margins. Operational indicators grew by double digits, surpassing inflation. We announced new international destinations such as Fasano Sardinia and Fasano Cascais, strengthening our international expansion, and we continued with our Fasano Miami and Fasano London projects. We also opened a hotel, the Boa Vista Surf Lodge Hotel in December '24, and we had growth in all financial indicators with adjusted EBITDA margin gains in the quarter. And now let's look at the hospitality numbers. Hospitality grew 24% against fourth quarter '23 when it comes to RevPAR and almost 20% on average daily against fourth quarter '23 with the occupancy rate reaching 58%. Now gastronomy, average cover grew by 12% year-over-year and 15% quarter-on-quarter, almost no loss, and this shows the company's capacity to implement price corrections without affecting its market share. Now gross profit. Our goal is to increase the quality of our products and be able to make price adjustments, and that led to a gain in margins. Our gross profit grew by 5% and adjusted EBITDA grew by 8%, reaching BRL 88 million. Now the airport. We had more demand than capacity. And so we are focusing on expansion. And for the first time, the EBITDA of this business unit exceeded BRL 100 million, which is a proof of our operational success. We have over 100 aircraft waiting to come to our hangar. So we are now starting the expansion of our airport going from 12 to 16 hangars, and we expect to deliver all of them by the end of the year. This expansion has a good infrastructure already in place. So the hangar expansion will bring a quick payback. From the operational perspective, after 5 years of operations, our airport is considered the first executive airport in Brazil with international movements and the second in national movements. We are now developing a carbon-free project. This is the only airport in Brazil with 100% compensation of the aviation fuel supplied at the airport. And we were awarded the first place by ANAC in the Sustainable Airports prize. And we opened a new certification, IESBA, international standard for safety and efficiency in executive aviation. This brings us even more quality in the services that we provide. And we are now a member of the International Airports Council for Latin America and the Caribbean. And in 2024, we achieved record results with significant margin gains. Now let's look at the numbers. This expansion happened due to great growth in movements. We had 41% growth in movements compared to '23. Liters filled over 50% growth compared to the full year of '23. And this impacts the growth of this business unit. We grew 84% of our gross profit compared to '23 and adjusted EBITDA grew by 92%. So we had growth not only in the nominal number of adjusted EBITDA, but also in the margins, reaching 62% of margins. This shows that we've been investing in recurring revenue and achieving significant margins. The new business in recurring revenue, JHSF Residences and Club, our total portfolio distributed across 113,000 square meters, including rental units and clubs. In '24, the number of leased units doubled against '23, and we had an increase in membership sales due to the success of the Boa Vista Surf Club and progress in the construction of Sao Paulo Surf Club with opening scheduled for '25, completion of the Fasano Tennis Club construction with opening in the first half of '25 and significant growth in all of our financial indicators. When we look at the results of this business, we reached BRL 89 million in gross results, 56% growth and adjusted EBITDA growing by 57%, reaching BRL 85 million. So today, in our business verticals, we have yet another recurring revenue business with significant numbers contributing to this business block. JHSF Capital, that's another business developed in the last 2 years in our recurring revenue block. It achieved BRL 2.5 billion in assets under management in a bit over 2 years. That's a significant milestone for a manager focused on co-investments, 10 funds under management, and we have an important role in giving advisory to strategic movements of JHSF and the capital rounds done in recent years was done through JHSF with an important role in the international expansion and group expansion with our own capital and third-party capital. Development now, real estate development. Good news is that we have achieved 66% of recurring revenue in our results, but real estate development also grew. Contracted gross sales reached BRL 1.1 billion in '24. We continue to deliver unique and exclusive projects, and we continue with the highest margins in the market, and we're now starting the construction of an iconic project for JHSF, the Reserva Cidade Jardim. 5% growth in real estate development, exceeding BRL 1.1 billion in sales and our sale mix brings us revenue to be appropriated in the coming quarters that will reach BRL 859 million. So in the coming quarters, we expect to have significant results in revenue to be appropriated coming from our real estate development. Accounts receivable, BRL 1.317 billion, and the company continues to have the highest margins in the market with 60% margin growth -- 67% margins in '24. So this proves that the strategy implemented was correct to preserve volume and inventory levels as well as product offer. So with the growth in recurring revenue, we were able to dose between the cycles that are positive for real estate development and those that we should focus more on recurring revenue. Now about capital structure in '24, in addition to the very important results that we had in terms of operations, we also achieved historical milestones in our capital structure. We achieved BRL 2.2 billion in issuance in the market in a bit over 2 months and a significant position in the sales of minority stakes in malls. We were talking about the fact that the company would focus more and more on high-end assets, and that's what we did with the sales of our 2 assets, shopping Bela Vista, shopping Ponta Negra in Manaus and Salvador, great operations developed by the company, but they gradually stopped having a connection with our high-end focus. So we recycled those assets, and that brought us BRL 733 million to our capital structure and balance sheet. And that gave us an even greater focus to high-end real estate development. Now issuances in the capital market, we did 2 important issuances last year, one of BRL 700 million and another one of BRL 600 million with loan maturities, 10 and 15 years. And as we announced this week, the highest issuance in the capital market ever made by JHSF. An original lot of BRL 750 million and the possibility of exceeding in 25% if there was demand and the demand was much higher than those 25%, reaching BRL 1.3 billion. So we did the issuance of BRL 938 million with the lowest cost that we ever had of 102.9% of CDI and unprecedented conditions, increasing our average term from 5 to 6.1 years. So also in terms of capital structure, 2024 was an important year in advances, and we reached historical milestones. Now let's talk about the structure of our debt. Breno, can you comment on our capital structure and debt level?

Thank you, Augusto. Here on the next slide, you can see our debt level at the company. We closed 2024 with a gross debt of BRL 4.490 billion and net debt of BRL 1.391 billion. Our net debt over EBITDA is of 1.8x and net debt over equity ratio of 0.34x, and this needs to be below 0.60. So we are at a very comfortable position at 0.34. We could be up to 0.60. That's not what we want, of course, but this shows the focus we have on this issue. Now when we look at the indicators and the indexes, this is also well distributed, 55% in CDI, 37% in IPCA and 8% others. So in the capital market, 80% of the company's debt is in the capital market and growing. That's where we can find long-term funding, which is a great match for our assets with a long maturity. So that's an important market that we have been accessing as we mentioned earlier. So we should always look at this market because that's where we can find long-term funding to fund our assets. Now on the next slide, you can see how the debt is broken down in the coming years. As Augusto said, we have accessed the capital market quite a lot throughout 2024. So we were able to extend our debt profile and reduce the debt cost as a whole. So we went from a duration of 5 years, and we closed 2024 with a duration of 6.1 years. In the second chart at the bottom, which is the most important chart in my view here, we were able to extend the debt and create a more homogeneous flow of maturity in the coming years. We had major concentrations of maturity in the first years, but then we worked on this in order to decrease the volume and have a more evenly distributed flow for the coming years. And now before we open for Q&A, I just want to say once again how happy we are to share these results of 2024 with all of you. The results are proof of our focus on developing our recurring revenue business and our focus to maintain the margins of the real estate development. Both businesses had significant growth, and we reached 2/3 of our results coming from recurring revenue faster than expected. This is a result of hard work by our team, and I want to thank the trust of our investors, market players and all the stakeholders who have been following our work. We continue making decisions diligently, and we are aware of the macroeconomic challenges that the country will face. But at the same time, we're very optimistic, and we think that we'll be able to continue delivering these results. If we look at 2024 and also the fourth quarter of '24, this makes us feel very optimistic, and we feel that we'll be able to continue on the successful track, diversifying our businesses between real estate development and recurring revenue, and that will enable us to continue working responsibly using our business depending on the macro scenario and the challenges that we face. Once again, I want to thank our partners for the year of 2024. And I would like to thank the support that we got in '24 and in '25 and the JHSF team. These results come from hard work of this team that works hard and wakes up every day trying to find ways to achieve excellence in our business and high quality. So my heartfelt thanks to this team. I'm very proud to be a part of this. This makes this company unique. And at JHSF, we think that the customer is at the heart of our operations. They are what brought us this far, and they are what will take us even further. Thank you very much.

[Operator Instructions] Our first question is by [ Juan ] from XP.

I would like to address 2 different topics. Breno talked about the liability management work that you did this year and with this well controlled maturity schedule. Does that change your investment plan? Are you planning to bring any projects that you were planning for later to earlier? So does that liability management talk to the company's growth strategy somehow? And my second question is about the Malls business. It did really well operationally speaking, and this year, you were able to make some noncore investments. So my question is, when we look at the occupancy of your Malls, it seems to be very high with great growth compared to last year. So my question is, how can that translate into leases or rentals, especially at Catarina, which has a different business and a different maturation as compared to the other malls. But do you see this high occupancy rate as an opportunity to increase your rental value? And what do you expect in terms of growth in that business from now on?

So the liability management work had great success in operations, 2 operations that were conducted in the second half of '24. The first with BRL 700 million, and the second BRL 500 million. Both operations were with unprecedented terms, in terms of rates and costs to operations and great demand for them. And more recently, we disseminated a material fact with the greatest CRI issuance, BRL 938 million. It was supposed to be BRL 758 million with a 25% additional if there was demand, and the demand was way above those 25%, reaching BRL 1.3 billion. So we issued an additional lot. The 102.9% of the CDI was the average for this operation, and that increased the duration of our debt and capital structure, and it also reduced the capital cost significantly. So this was the right move that addressed the maturity of our debt this year, and it brought us a perfect curve in terms of debt distribution in the next 10 years. Now looking ahead, we continue with significant investments to be made in our new projects. In '24, we invested over BRL 0.5 billion in recurring revenue projects. And these investments proved to be right when you look at the return that we got in those projects and the margin that the recurring revenue business has been bringing, which is quite significant and high. And something that we pay a lot of attention to is the operational success and the acceptance of our customers. And this movement continues part of the investment that we made last year, brought results in '24. The rest will bring results in '25, but we have important deliveries for '25 and these investments will support us. And the CapEx brings improvements like Sao Paulo Surf Club with deliveries for this quarter and other openings for the quarter. The Town Center, our new mall in the Boa Vista Complex, Boa Vista Village also expected by the end of the year. So the company continues making investments and focusing on these high-end businesses. And the operational management also contribute to the investments. So part will come from this continual liability management that we've been doing in part coming from the operational success of our product, and in Q4 with significant growth in operations. Now about Malls. In Q4, the operational performance was quite relevant, 20% growth in sales. For the [indiscernible] indicators, all of them had 2-digit growth. For 4 years, we've been having 2-digit growth in this. So this shows the operational success of our malls mix and this focus on high end with exclusive curatorship of our developments is boosting this. And rental growth comes from sales growth. So the more we take care of this mix with this great curatorship, having flagships of international operations, all in our malls, exclusive gastronomy brands in our malls. So this ecosystem that we put together focused on high-end customers contributes to the operations of the shop owners. And this, at the end of the day, translates into profitability and rental of these operations.

Like he said, when we decided at the end of last year, what the budget would be for '25 and the investments to be made in '25, we were already expecting higher interest rates. We were very selective. So regardless of our liability management, we also studied carefully all the investments for '25, and we are focusing on them. We're confident that these are the right investments for the year. So we are not planning to change the strategy because of the success of our liability management. This was all well planned and we'll continue with our strategy throughout the year.

Next question is by [ Matheus ] from Santander.

I actually have two questions. Something that drew our attention positively was the real estate development margins. Can you give us for the details of the reasons why you achieved such good margins? Was that product mix? Or did one product help more than the others? Now you also talked about sponsorship revenue and developments. Can you give us further details of what you mean by that? And can we expect more of this revenue to come in the near future?

Okay. I will start, and then Mara and Breno can add to my answer. In development, well, first of all, thank you for your question, [ Matheus ]. In Real Estate development, we continue with a firm strategy when it comes to the margins of our business. The growth of the recurring revenue block allows us to take on a position of preserving our inventory and value of our products, protecting our margins and respecting the prices of what we produce and that's, of course, comfortable for the company that feels at ease to control its offer. Because now we are a company with this risk diversification. Now for the first time, recurring revenue is accounting for 2/3 of our revenue. So this posture that we have had for years now will be strengthened even more so that we can control the price of our products and the margins we get from them. We continue with the highest margins in the market in real estate development product. Sales exceeding BRL 1 billion. So this is a strategy that we'll continue to implement so as to have good margins in this business outperforming the rest of the market. And that shows the power of having this recurring revenue arm that is quite robust and that enables us to be even more selective and responsible when it comes to the margins and values of our real estate development products.

Let me just add something to what Augusto said, [ Matheus ]. In Q4, we had a highlight in the sales of lots. And this had a positive impact on the margins and also the evolution of the Reserva Cidade Jardim project. And the second question about the sponsorship revenue. There are brands that want to be close to our audience, to our customers. So we have this nonrecurring revenue coming from sponsorships. Like at Catarina, we have this revenue every third quarter. And also, we have events held at our developments, and there are partners who want to be there to create a connection with our customers. So we can say whether this is going to be recurring or not, but we see a higher and higher demand in this type of revenue.

Next question is by [ Herman ] from Bradesco.

I have two questions. The first one about real estate development. Sales were great in this segment. So can you give us further details about the reasons for this performance? Was that on -- because of the sales in Cidade Jardim? And what do you expect for '25 in terms of performance of this business? And now another question, can you give us a general update about the Santa Helena project? When do you expect to launch this?

Thank you, Herman. Indeed, we had a positive year for development with sales exceeding BRL 1.1 billion. The success in the sales of our products, like I said in the previous answer, was due to control of inventory and control of the offer to the market. And we have a quality in our businesses that is a top priority for us. Our development products are delivered with all the finishing floor, metal fixtures, kitchen equipment. So the products that we deliver in this segment today is unique. The quality and the way that we design the projects, the architects we use, the location of those products, and most importantly, the expertise that JHSF has acquired throughout it is focusing on the high-end segment are some of the factors for the success. And of course, we're always trying to control our inventory, control our offers to keep the right pace and meet the demand, never leaving margin aside. And we have reached this quarter with a good amount to be appropriated, exceeding BRL 800 million in revenue to be appropriated. So this revenue should come in the coming quarters. And this gives us a positive outlook for the company from now on also in the real estate development segment. About Santa Helena, that's a great question. The project is doing really well. It's quite advanced in terms of its concept. The expectation is great. Although we don't have full control, we expect the approval to happen by the end of Q1 with the official launch of the project in the beginning of Q2. So we are expecting to have a launch event of the Fazenda Santa Helena at the location itself, a new important location for us in the Braganca surroundings. So we saw great advances in recent months, and we're very optimistic. We expect this approval to come soon, and the launch is expected for August or September.

Thank you, Augusto. And about Santa Helena, this question is related to the other question you asked. This should have a positive impact on our 2025 sales and beyond.

Augusto and Breno, I also got some questions in writing from our attendees. Some of the questions are about dividends. So we made a payout to March, but we have not announced the dividend payment for the rest of the year. So can you talk more about that?

Yes, sure. JHSF has been acknowledged as the only company at [ B3 ] paying monthly dividends in addition to the banks, and that's a very positive practice. We paid monthly dividends throughout '25 as well up until now, and we are assessing this from now on. The fact that we had robust growth in the recurring revenue block and the development of these recurring revenue businesses and the performance in our balance sheet, giving greater predictability of future revenue for the company makes us feel comfortable in conducting this -- I mean, in making this decision. So we're so assessing this. And whenever we have a new decision, we will announce that to you.

Thank you, Augusto. Now Breno, we have a question here about the recent fundraising. How will that impact your capital structure because that was a recent fundraising round that you did, right?

Yes. We did this fund raising, It was completed on Monday. We wanted to look at all the debts maturing in '25. So we proactively saw a market opportunity to do this liability management in advance. So we did this fundraising of about BRL 1 billion, which addresses all our debt maturing throughout '25. So what we can say is that we want to work always in advance, and we see a challenging market in '25. So we decided to act now and address that debt right now. When it comes to the leverage of the company, we do not expect increase, and I'm talking about net debt, of course. We've been working with a higher capital level. Since I joined the company, we made the decision of having this higher cash level, and that's what we've been doing. So we've been working hard to have all of our CapEx done, having a solid balance sheet, but keeping the leverage as it is. We're very comfortable with the leverage level that we have today. And we think that we are keeping the right leverage levels in the future. So this is just the continuity of the liability management that we started a year ago. Whenever there is a market opportunity to extend the maturity of our debt and reduce costs, we will consider doing that. So this is the mindset that we have in this.

Thank you, Breno. Now our last question, which is to me. The investor is asking whether there are any programs for investors and shareholders to get to know about the company's projects and assets? Yes, we have recurring visits. Please send an e-mail to ri.jhsf.com.br, and we'll schedule a visit to all of those who are interested. So Augusto and Breno, there are no further questions. So if you have any other questions later on, we are available at ri.jhsf.com.br, should you have any other questions. Now I turn the floor over to you for your final remarks.

I would like to thank you all for joining us in our webcast. And I want to thank you -- thank our stakeholders once again and our great team. As I said, repeated times during this call, they were key for the amazing results that we achieved last year. The company continues firm on the track to continue growing on these 2 fronts, and that shows that we have greater predictability of results with the growth of the recurring revenue business. So thank you very much from the bottom of our hearts for your support in 2024, and thank you for joining us today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]