JSE Limited (JSE) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the JSE interim result. [Operator Instructions] Please note that this call is being recorded. I would now like to turn the conference over to Leila Fourie. Please go ahead, ma'am.

Good morning, everybody, and welcome to our 2020 interim results. Thank you for joining the call. We are incredibly pleased with our -- with the quality of our results. We feel as if we have withstood the dynamics of the pandemic. And while we recognize that these results have been achieved on the back of a very challenging backdrop, we do also recognize that the JSE is countercyclical and resilient, and that our high revenues and our costs, which were controlled, have translated into EBIT growth and a high-quality cash flow earnings. I'm going to take you through some key highlights. A bit of detail on the business review and looking ahead what we expect in the future. I'm not going to spend an enormous amount of time on the environment because we're all too aware of the tremendous volatility that we're seeing both on a global level, and translated into our already weak fault lines that we were navigating pre-COVID. Obviously, the fiscal cliff, growth and the exit from the WGB Index as a result of our downgrade have all played into and compounded the COVID effect. From an overall financial perspective, we are very pleased with strong revenue growth, which is largely attributable to the capital markets-related revenue. This was obviously heightened by the volatility due to the pandemic. In that context, we remain focused on cost management, with the increase in OpEx largely owing to the annualized impact of ITaC and the increased risk landscape spend, while nonrecurring costs were largely driven by the pandemic. We did deliver operating margin accretion on the back of very strong revenue growth and sustained earnings quality during the period, with high cash conversion, and this has become a hallmark of the JSE. Moving on to our market activity drivers. You can see that the weak primary markets occurred during -- in line with global trends due to very much very challenging macro environment in South Africa, which is obviously not conducive to capital raising or IPOs generally. Our cash equities saw an extremely strong increase in the volume of transactions, but value traded increased at a slower pace, and therefore, we had a greater number of smaller transactions. Our value traded was stable in the secondary bond market coming off an extremely high comparable base last year and including very high quarter 1 trading. Revenue growth from derivative contracts despite lower volume traded overall year-on-year was experienced, except for interest rate derivatives. So our key takeaways, in summary, are that we've experienced strong revenue performance, largely driven by higher activity on the secondary equity market due to COVID-related market volatility. We did have a short-term boost from higher activity, and this does mask the longer-term challenges of continued deterioration in the South African economic environment. Although we've had strong revenue growth in information services, this was partly driven by the weaker rand. It's pleasing to notice that as -- to notice this increase as revenue diversification is a key strategic focus. We did have good OpEx discipline, leading to good EBIT margin accretion year-on-year despite some unusually high nonrecurring costs and higher depreciation profile. CapEx growth was in line with our plans and within our financial year budget. And of course, the hallmark of sustained quality earnings and cash conversion does, of course, strengthen our balance sheet optionality. Moving on to the key highlights operationally for the year, which was a response to the pandemic. We are tremendously pleased with the operational resilience and flexibility that the team and the market at large demonstrated. And this provides us with an excellent baseline for the organization to continue its transformation and to deliver growth into the long term. We proactively engaged our market authority and market participants to create a favorable environment for customers and for our partners. And the JSE is a supremely tech-empowered innovator. And this increase -- this regular investment and focus on tech increased our adaptability and our ability to withstand the challenges of the COVID disruptions. CSR and sustainability are an integral part of our approach, and we are well positioned as leaders in this space, particularly in the emerging market environment. So in summary, despite the disruptions in the external market, there were some notable developments for us from an operational perspective. And we're particularly pleased with this because many of our counterparts and many of our market participants put large-scale projects on hold during the COVID crisis. And not only were our team able to cope with the tremendous volumes -- unprecedented volume in March, the highest of which we saw on the 24th of March, but they were able also to continue to deliver on large-scale projects. Notably, our gate listings requirements have just been gazetted by the regulator. We said that we would continue to lead in the sustainability segment, and we introduced a new segment, enabling the trading of bonds in our social and sustainability segment. And I won't go through all of the other details, but we did announce a number of important new products to drive growth and specifically in our high-priority areas. I'm going to quickly work through the business review. Before I move on, should we take questions or should we leave those to the end? I think lets leave them to the end. And I'll work through those and then hand over to [ Commony ] who will take us through the financials -- through Aarti. Right. Capital markets, in terms of our primary markets, primary market activity was really muted in South Africa before the COVID crisis, but we've had no new actual IPOs in the period. We have had a couple of corporate actions. We've had a slight increase in revenue, reflecting secondary offerings on equity or debt markets. And we've seen a decline in the new -- in the number of new bonds listed, but an increase in value of debt capital raised. And of course, this is off an extremely high base last year. The final round of public consultations for our new listings requirements have been concluded. And we did promise to focus on trust and improving governance, and we're pleased to report that we've been able to deliver on that promise. Moving on to our equity market. Our secondary equity market was the primary driver of revenue growth due to heightened market volatility. We had a greater number of transactions, but the average value traded was not as significantly higher. Essentially, higher trading activity and liquidity occurred and peaked during the hyperactive trading period of March and April. The JSE supported high-frequency trading efficiently during that period, and it's reflected in our increased co-location activity. And the major MIT upgrade will be completed before the end of the year, and we're particularly pleased that, that project was not put on hold during the crisis. Our capital markets and bonds and financial market derivative. Overall, revenue was up 5%, primarily led by higher revenue from a secondary bond market, which was -- experienced flat value traded, but an increase of the number of transactions. Financial derivatives, i.e., equity, FX and interest rate derivatives, revenue was slightly up to 27% increase in the interest rate -- due to the 27% increase in interest rate derivatives contracts and despite a decline in the equity derivatives value traded and FX contracts, remarkably smaller parts of our businesses. Insofar as the commodity derivatives goes, our revenue was up 3% overall despite lower contracts year-on-year. Our improved outlook for the local grains market bodes well for commodity futures. And although we had lower volumes, we had higher value traded and our diesel futures will be -- hopefully going live with the market in half year 2. Our BDA back-office services are very much reflective of the higher trading activity in the secondary markets. We had a higher number of transactions, but a lower average deal size. And we completed the upgrade of BDA software during the period. With regards clearing and settlement revenues, these are reflective of, again, of higher trading activity in the equity secondary market, which translated into an increased billable value traded and particularly in central order book activities. License applications that we are contemplating and researching at the moment are in the OTC CCP stage. We are in the design stage. We very much expect that this will translate into an increased value-add to our customers, particularly when we build in potential for margin offset between the various products. Insofar as information services go, we had double-digit revenue growth, which was close to the capital markets-related revenue. 18% reported growth also reflects the rand weakness versus the U.S. dollar. And we were up 11% at a constant FX rate. Growing -- the growth in this area is very much reflective of the success of our diversification strategy, and this is a key area of focus. We've invested tremendously from a projects perspective, and this will be a priority area for growth, organic and inorganic growth, moving forward. I'm now going to hand over to our CFO, Aarti, to discuss the financial results.

Thanks very much, Leila. So while all of Leila's event-driven activity drivers, the business efforts from within a very constrained operating environment, has landed us what I would call a fairly healthy income statement. So this half is really a story of 3 financial elements in our results. Firstly, record high revenue growth and revenue recorded. So 22% revenue growth landing on ZAR 1.32 billion total revenue, reflective of, one, our very strong diversified revenue portfolio, which has come from, yet again, in this half, as it does over the years within a constrained environment. And largely bolstered by a number of events, and in particular, one of them being the COVID volatility as well as some ForEx gains that we were able to realize in our other income numbers. Second, what we're calling very good OpEx discipline despite some higher nonrecurring costs. And in particular, good OpEx discipline on the personnel expenses and on the technology cost are shown well under control. So I mentioned despite nonrecurring costs, which is partly COVID related and partly un-COVID related, and I will unpack that in a bit. And lastly, as has been seen by a number of years in this business, the very high cash-generative nature of this business has landed us on a very strong cash balance, but also demonstrating very good application and of converting our earnings into cash within the period. All of this resulting in very strong EBIT margin accretion or rather EBIT margin numbers with the accretion of 60 bps in this half. The other call out is our effective tax rate having dropped to 26.2% from 27.6% last year, and that is largely because of our permanent difference in our share of the equity accounted associate [indiscernible] and, to a lesser extent, some adjustments in our tax calculations. This has shown a fairly stable impact margin as a percentage of revenue, but on a much higher nominal value in profit terms. Now we watch, as you know -- as many of you would know, we watch our long-term performance and cost management very carefully in the business, and we tend to map them out over a number of years. And you can see strong revenue generation included in the multiple years with a number of event-driven -- as you know, our market is pretty event-driven. And we're comfortable to say that at a base level, this revenue growth is here to stay, as you can see in the backward long-term trajectory. We achieved a number of these results on the back of, as we said, the strength of our diversified revenue where we saw some uplift in the secondary market this year, which was different to uplift in last year's secondary market. In particular, we saw a number of activity drivers surge in last year versus those activity drivers more muted this year, and the cash equity numbers came to the front and foremost this year versus last year half. So let's just talk to the strength and resilience in our diversified revenue portfolio. We're quite proud of that stretch in our diversified operating business model. And all of this done with what is relatively stable, as we promised to you before, a headcount base, and you can see we landed on as-good-as-flat headcount base at spot rate last year. Now that mix has changed slightly, and we can talk about that a little. But essentially, in our cost base, and as you know, many of you know, cost management is one of our key priorities in this business. And included in those is the translation of 2017's cost-cutting efforts and in anticipation of this year's apex in the depreciation profile and the post go-live costs related to ITaC, but that is also, in the growth, further exacerbated by some noncyclical or atypical spend, which we'll unpack thanks to COVID and some deliberate efforts in our business. So overall, that cost growth of 20%, we promised that we would unpack that for you in this results call, and we have done so. If you carve out the nonrecurring costs within our fixed cost base, we have grown our managed cost growth to 11% half-on-half. And that is inclusive of, as I said, the higher depreciation profile, as we had expected and anticipated in ITaC, and that's largely a noncash component, which is reflective prior technology spend as well as the post go-live costs associated with a large program in the form of support and maintenance on software. So and -- included -- so landing on 11% growth in our nonrecurring -- in our recurring cost base is something that is reflective of our cost management efforts. And then we said that we would carve out the remainder of the atypical spend for you. And much of that is a balance between COVID-related costs incurred as well as very deliberate efforts in legal fees, for example, in spend associated with the competition tribunal for the Link SA deal. There's a smaller element of noncash-related costs on the back of a ballooning lease provision that we are seeing due to changes in the patents in our employee base. So if I were to -- we've shared with you some more detail in just the regions across our year-on-year main drivers for our cost growth across the border from categories. And really, the 12% personnel costs is coming from the 3 elements. We also promised to share with you the one-off costs. Included in this half was some executive committee changes that were made that included some noncash IFRS acceleration for long-term incentive scheme as well as restrengthen and retention payments that we made. Apart from that, the ballooning lease pay provision and the headcount contribute towards the cost growth and more so the annual increase in salaries, which is muted at 2% year-on-year. And that's because the headcount also has not increased drastically. As I said, it's been flat largely. In technology costs, we've unpacked for you what is related to the risk landscape management, which is cybersecurity spend, a number that is [ called out ] on every results because it is something that is difficult to track and anticipate and to model going forward. It increases typically way in excess of inflation, but it is a spend that is critical within our technology cost base. But the rest of the technology cost base was able to absorb all those new costs related to ITaC support and maintenance and other COVID-related costs on the back of our cost-saving efforts in the prior years. As we've shared before, our depreciation and amort profile is much higher in this year. There's some base effect from last year that you would see, reminding you that we had an absence of the depreciation in Q1 last year related to ITaC. So a combination of base effect and the annualized effect of ITaC depreciation this year being pretty high. Our general expenses, up 29% year-on-year is more mainly reflective of that COVID-related costs and the legal fees spent at the competition tribunal. Again, a good part of this big cost increase is noncash, as we mentioned. So that relates to operating expenses. On the capital expenses profile, we maintain the guidance that we've given you in the past of ZAR 140 million on our CapEx plans within this business. And despite the very challenging environment this year -- this half, we were able to execute on a number of our CapEx-related projects, that I mentioned the major upgrade to the trading engine, that is on track and we've managed to stick to our CapEx plan on upgrading the trading engine, and so we continue to forecast the ZAR 140 million, which was unpacked for you. Now we've also our fleshed up our quality of earnings, and this is the cash generation ability in the business, where our -- the quality of earnings has proven very high cash conversion, which is about 94% of our adjusted earnings in this half in particular. So as I mentioned before, cash generation and with that, the efficient capital allocation, are top priorities in this business, which we manage very carefully and something that we are particularly proud of. The cash balance is typical -- the cash flows that we landed in this half is typical of the half 1 cycle. We -- it is inclusive of the dividend payment, which is typically a half 1 payment that we made. The dividends in this half was a record-high dividend that the JSE has paid and included in the investing activities, which seems pretty high for this half and you wouldn't see that in the income statement, is a 7-year prepayment for support and maintenance related to the trading engine, where we enjoyed a very favorable ForEx rate. That invoice -- that support is USD-denominated, and we were able to lock in that for the next 7 years, and you'll see some of that translate into cost savings in our support and maintenance on technology costs. But of course, we have to account for cash terms, and that was reflected in the ZAR 131 million. So as I said, as much as the cash declined versus beginning of the year, which is typical for a half 1 cash flow situation for the JSE, it was largely stable from last year's balance anyway. So with that, I'll take questions later and hand over to Leila

Thanks very much, Aarti. So looking ahead, I would say, in summary, we have demonstrated our ability to navigate structural disruptions in the markets. And we have confidence in the JSE's ability to manage further changes or further shocks to the economy, which may come in the second half of the year. There are too many variables at play, and we are focused on those things that we can control. We've demonstrated resilience during the crisis, and we will continue to invest in the business. I'll remind you of the strategic priorities, which we spoke about at the year-end. And I want to just reiterate the direction of travel that we signaled in the FY 2019 call. I will highlight some of the progress that we've made along the way with some of these objectives. Our story and strategic direction of travel is really a story of continuity. Our plan is largely in line with the direction that was indicated and established by previous management. However, the COVID crisis has introduced a new dynamic as it relates to the pace of change. And so the pace, particularly of inorganic diversification, will increase. And we are experiencing an acceleration of certain megatrends because of the COVID pandemic, and this leads us to accelerate certain of the work streams at the JSE. Insofar as our strategic priorities go, we've made pleasing progress and what we promised to do in our half year 2019 call, we have delivered on. We discussed driving inorganic -- driving our inorganic growth strategy. We have employed an experienced investment banker to head up the M&A area. We also brought in, while we were hiring a contractor consultant, who was an experienced investment banker, to ensure that we gained momentum from the beginning of the year. We've delivered a strategy, and we are making significant progress in that area. The progress relating to the Link Market Services has really been subject to the competition tribunal. We've invested heavily in our executive time and focus in that tribunal. We hope to hear from them in September. And if the competition tribunal rules in our favor, we are ready to immediately integrate that business into the JSE. We spoke to you about delivering new products and services, and we have introduced a number of important products, particularly as it relates to the information services area. I've spoken about some of those, also introducing a transformed Jibar futures product together with our bond market indices with FTSE Russell. And once our upgrade to the MIT system goes live, that will introduce and open the door to the potential to introduce more products. We've made great progress on the OTC clearing business case. We are engaging the market, and we have engaged regulators, and we're going through an RFP process. We spoke to you last time about running trusted markets. I'm pleased to say that we have implemented a number of projects relating to the automation, particularly of end-of-day prices and valuations. We have reduced tremendously our downtime. We've increased the number of changes that we've introduced to the system by 14%, and the number of priority 1 incidents affecting the market is down by 50%. And I'll remind you again that this is the case even during the very hyperactive March trading period, where we recorded record values in traded and massive increases in circuit breakers. Our increased focus on cybersecurity was well-timed given the work-from-home environment, and we will continue to invest in that space. Our upgrade to the equities trading engine is progressing well, and we're on track to deliver by the end of the year. We have increased our focus on regulation of issuers. You would have seen 2 notable finds that have been levied and investigations into events will continue for both companies -- at a company level and at an individual director liability level. We're very pleased with the implementation of the debt listings requirements is now through. We went through a tremendously detailed engagement with market participants and we are pleased to be able to announce the end of that process and the final implementation. Particularly pleasing is that when I last spoke to you, we spoke about what we need to do to try and encourage listings. One of the areas with inbound dual listings on the exchange, this is a hallmark feature of our exchange, particularly relative to other emerging markets. And we have aligned with the standard board in the LSE. Now you'll remember that the LSE has a main board, a standard board and then our equivalent of the AltX. This now means that any listed entities that are primarily listed on the standard board at the LSE are now able to seamlessly secondary list on the JSE. We will be partnering with investment bankers to target specific potential secondary listings, and we will be engaging on a roadshow as soon as COVID allows. Leading by example, on the national agenda, could never be more important than post our downgrade, our fiscal cliff and COVID crisis. And there were 2 areas. Firstly, partnership with public-private -- so private-public partnership. And secondly, our desire to lead or our vision to lead on the sustainability front. We have delivered impactful corporate social investment. You would have seen the number of initiatives that we announced. Our solidarity -- 2 days of trading that we partnered and stacked hands with the market. That was tremendously successful. And we believe that the JSE has positioned itself as a proactive, flexible and resilient leader during the period of the crisis. Not only did -- was that reflected in the tremendous support that we've received from the market during that period, we believe we've also built significant goodwill with our customers as a result of this. And we have also focused in on our less liquid stocks, where we reduced pricing for trading and clearing by 50%. We can't directly link activity to that necessarily because there are many factors at play, but we are pleased to see that our AltX index has increased by more than 10% in July. So we are hopeful that, that will contribute to a growing smaller and mid-cap market. We have also continued to engage with government on the SA Inc. agenda. We are intimately involved with "Be for SA" an initiative relating to restarting the economy. And we are engaging government and private sector with the idea of potentially expanding our SA Tomorrow roadshow to include not only New York, but also potentially Dubai and London, and then potentially another roadshow involving Southeast Asia, which would cover the regions of Hong Kong, Shanghai and Singapore. Now the benefits of a virtual roadshow means that we can get much more senior representation, although we already had the Governor and Minister of Finance -- Governor of the Reserve Bank and the Minister of Finance. We would like to up our game and increase even more senior -- more ministers at a senior level and equally so, leaders. We feel now is the time for us to put ourselves forward as a country and an investment destination as the potential risk of environment starts to evolve and the structural low growth in the developed world, potentially creating a pent-up demand and a search for yield. So with that, I'll stop and open the call for questions, and just thank you for listening.

[Operator Instructions]

Okay. We have no questions on the webinar at this point.

We have a question from Keamo Konopi of SBG Securities.

Thank you, everyone, for a really good set of results. So I just have 2 questions. The first question that I have is just on a small amount that relates to the trade receivable payment. So the additional provision that has been put through on the trade receivables book, could you please give a bit of commentary on that? And with like sort of just the trend moving forward for that, because, yes, so we see that the provisioning coverage has actually increased from 0.7% last year to about 1.3% this year. And another question that I have is just on the -- on your growth initiatives. So which growth initiative are you most excited about? And yes, and that's the main thing. So which growth initiatives are you most excited about? And which one of those, in your view, is transformational in sort of offsetting the sort of muted growth in the SA environment?

Thanks, Keamo. Aarti will answer the first question, and then I'll lean in on the growth.

Just say I'll take the boring one so you can take the more exciting one on our growth opportunities. So Keamo, what is -- what the ECL provision is really for, it's the ZAR 4 million that relates to a number of businesses that we've seen go into business rescue or voluntary delistings on that and would typically not pass the test from a bad debt provision perspective or rather, recoverability perspective, and so we had to make that provision. And it's a whole mixed bag of different companies but there are 1 or 2 that are predominantly causing that ZAR 4 million, and it is really just reflective of outstanding [ books ] owed to the JSE. So hard to call that trend going forward. I mean we could not have called that these business are going to business rescue. And I think it is an element of cash-strapped-ness and COVID-related. So we're not going to necessarily call that number going forward, especially from a materiality perspective. At this stage, there's nothing material in the debtors book that scares us at this stage. But really, really hard to call. So that explains the ZAR 4 million. Leila, do you want to…

Great. Thanks, Keamo. So it's very difficult for me to identify 1 initiative that we're most excited about because our growth, it will come from a number of diversified sources and drivers. What I would probably say is that there are 2 sources, organic and inorganic. Insofar as the organic growth grows, we have reiterated on a number -- for a number of years, our focus on the market data space. And I spoke to you last time about the importance of China and Southeast Asia as a potential inbound flow of -- or inbound flows. And I'm pleased to confirm that we have completed a contract with a China telecom company, and we are now bedding down a point of presence or a physical connectivity to carry our data from Johannesburg to Hong Kong. We are in the final stages of working on a cooperation agreement with an entity which would allow us to pipe our data through the Shanghai Stock Exchange. Once this relationship is formalized, we'll follow that up with a roadshow. We have a number of other important areas of focus in the data space. As you may have seen in our detailed announcement, we did launch a dating -- data pricing structure to encourage retail brokers, and this is really a bulk discount for retail brokers. We transferred the fixed income indices to FTSE Russell, and we moved our JSE data management platform onto a new platform for cash bond data. Now we are focusing on increased analytics and the quality of data. We are also focused on inorganic, potentially acquisitive opportunity within the data space. Insofar as the inorganic opportunities go, we have learned from the past, and as we stand today, and we are clear about what we value and our priorities. But we are focused on the quality of the deal, and we will execute. I've talked previously about having a deal team. We have comprehensive processes now in place to enable due diligence. And our focus in the inorganic space is really bolt-on type acquisitions, and that would stimulate annuity income focused on the information services space, the issuer services space and potentially, tech. What excites me tremendously is the potential opportunity to expand our services into a private market space. And we are investigating -- we're coming out of the starting blocks, so this is very embryonic. At this stage, we are investigating possibilities in both the infrastructure as an asset class goal and also the SME space because we believe SME to be a growth node of the country going forward. Hope that answers your question, Keamo.

Yes. No, it does. That was very comprehensive.

A pleasure. Any other questions?

[Operator Instructions]

Excellent. We do have one coming through. Can we ask Matthew to read it out?

We've got a question from Mark [indiscernible]. He says, reflected in the results, you mentioned that you've hired an investment banker. How much of the ZAR 2.2 billion in cash is free and nonregulatory? If you are looking at M&A and how are you planning to finance this? Do you have a net debt-to-EBITDA seeding number? What is the hurdle rate for any acquisition that we're allowed to make?

Okay. Excellent. Thank you, Mark. And this has been a common theme and a common line of questioning. I will reiterate that the acquisitive strategy that we hearing is bolt-on. We're not looking to bet the exchange. We're not looking for -- to leverage our balance sheet enormously. And it will be an incremental growth strategy along the lines of what we've already done in Link. Insofar as our capital goes, we have done stress testing through the crisis. We've increased margin, and that would obviously buffer us from an expected loss perspective. So capital, as we all know, is there for unexpected losses. Our capital adequacy remains. We don't disclose our actual capital adequacy numbers. And we are engaging the regulators. The regulators have not, to date, raised any concerns about our capital adequacy. They will, however, come back to us by the end of the year to confirm. We are cash-generative. And at this stage, we don't have anything material to announce relating to dividend policy or our cash forecast. Aarti, do you want to add to that?

Yes. So the ZAR 2.2 billion balance needs to support the remainder of the year's CapEx assets, so the unspent portion of ZAR 140 million, it needs to maintain the ring-fenced portion of regulatory capital. And of course, from a capital allocation perspective, it must service or fund any M&A activity, if we do that as well as fund any dividends by the end of the year. So it's not necessarily useful to take the entire ZAR 2.2 billion say that, that number is wholly attributable to M&A activity or wholly attributable to a dividend, including a special in that. So we're sticking to our guidance of being a progressive ordinary dividend growth environment. And on the point of headcount, we must remember that yes, we did hire investment banker-type skills, but that's within the headcount base -- the planned headcount base. And that headcount base 5 years ago was 20% higher than it is this half. So within that 401 spot headcount exit at end of June, we could only achieve that through changing the mix of the skills as opposed to the absolute bodies. So the number of bodies have actually decreased, and we've managed to pull these type of results.

Yes. So just to reiterate, we are not looking at any large-scale staffing changes insofar as the numbers go. We do recognize that the next-generation technology and the way of the future requires a new set of skills, and so we will be strategically hiring for the right individuals, but this should not affect our wage bill on a general and overall basis. It will be targeted and very specific.

No further questions.

No more further questions coming through the web. Are there any more questions on the call?

We have no further questions on the conference.

Great. If we have no further questions, we can really just close. And I'll summarize to say we are tremendously positive and very pleased with the results. We are particularly pleased with the fact that we have demonstrated we are geared for change, we are resilient and flexible. Our tech focus will continue, our growth focus will continue. And particularly, the most consistent hallmark of quality earnings, we hope to continue to deliver into the future. Thank you very much.

Thank you.

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