The Navigator Company, S.A. (NVG) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to The Navigator Company's First Half 2020 Results Conference Call. [Operator Instructions]. As a reminder, today's conference is being recorded. I would now like to turn the call over to Mrs. Joana Appleton, Director of Investor Relations. Joana, please go ahead.

Thank you, and welcome to Navigator's company conference call and webcast for the first half and second quarter of 2020 results. So participating in this call today are the following members of the Board: António Redondo; Adriano Silveira; João Paulo Oliveira; Fernando de Araújo; and Nuno Santos. So we will start as usual with a brief presentation of the main highlights for the period, and we'll have a Q&A session at the end. António will start now with a comment on the May figures recorded in the period. António, please?

Good afternoon, ladies and gentlemen, and thank you for joining us today in this wonderful sunny afternoon here in Lisbon. I will start by making an overview on Q2 2020 on what was one of the most challenging quarter in the [ business' history ]. This was, of course, a global phenomenon, where people and businesses around the world felt the impact of COVID-19 pandemic and related lockdown. And the COVID-19 lockdown clearly impacted the market demand for some of our products. Estimates point of contractions of the European uncoated woodfree market of around 25% in the second quarter as compared to 4.1% in the first quarter of 2020. And when we look at the U.S. market, its contraction is estimated to have been even larger at over 30%. The sheeted paper business, particularly for graphic use, was the hardest hit because, with advertising and commercial printing severely affected by the economic lockdown. The reels business proved to be more resilient and has been more versatile in terms of uncoated woodfree application. The low level of demand for printing and writing paper during the pandemic forced many manufacturers on every continent to cut production. Navigator was not an exception and took measures to manage output of uncoated woodfree paper over April, May and June, in line with the downturn in demand, thereby controlling stock levels between late March and late June. The distributed -- the group reduced its stocks by around 19% while industry estimated to have declined around only 6%. The supply management also allows to avoid further price erosion down the road and to preserve working capital. We were able to mitigate the impact of the reduction in paper sales with our 2 other business, pulp and tissue. On the pulp side, performance was quite different as we managed to increase significantly our sales, expanding commercial opportunities, diversifying into new regions and taking advantage of the increased availability of market pulp due to the reduction in [ paper unit price ]. Therefore, we sold 110,000 tons of market pulp, an increase of almost 80% year-on-year in what was the best quarter since 2010. On the tissue business, we increased sales volume by about 10% versus Q2 2019 as ramp-up of new capacity continued to remain positive. In terms of prices, paper remains pressured with pulp continues to fall and paper demand [ also ]. The lower pulp and paper prices impact was partially offset by the recovery in pulp and tissue volumes and by a significant improvement in cost performance. We managed to achieve important reductions on both variables and fixed costs that allow to protect our EBITDA margin. So in the context of sharper construction demand and a significant deterioration in the uncoated woodfree market, Navigator succeeded in recording growth in other business areas and implemented a series of forceful measures to control costs. Finally, I would like to point out the significant amount of free cash flow recovered in the quarter of almost EUR 100 million. We will give some details further ahead. This is a result of this CapEx and the very efficient working capital management. If you can please now turn to Page 5. You can look that the turnover reached EUR 696 million in the first half of 2020, with paper sales accounting for around 67% of turnover versus 72% in the first half of last year. Pulp sales achieved 11% against 9% last year. Tissue sales 10% compared with 8% last year. And energy sales also stood at 10%, similar to last year. When comparing with the first half of '19, turnover fell 19% as a result of lower [ sales ] performance and lower pulp and paper price. Market pulp volumes grew significantly, over 50%, and tissue volumes also performed well, increasing 10% year-on-year. The improvement in production costs, both variable and fixed, was key to maintain margin resilience. EBITDA totaled EUR 140 million with an EBITDA margin above 20%. So free cash flow generation in the first half was also significant and stood at EUR 114 million and improvement [ rates ] mainly from Q2, as I've just referred. Net debt was reduced to EUR 700 million by the end of June, down EUR 50 million over the end of year and EUR 96 million over the end of June 2019. Therefore, net debt-to-EBITDA remains at a very comfortable level of 2.3x. On Slide 6, we have an overview of last 6 quarters, with a clear impact of the COVID-19 pandemic reflected in Q2 2020 performance. Besides the pandemic, Q2 reflects lower pulp and paper prices. Paper prices declined around 7% against Q1 '19 and at about 2% against Q1 '20. Pulp prices fell 26% quarter-on-quarter and was flat versus Q1 2020. Even in the backdrop, EBITDA totaled [ EUR 560 million ] and operational cash flow approximately EUR 50 million. Let us take a closer look at the EBITDA achieved on the quarter on Slide 7. So EBITDA in Q2 totaled EUR 52 million compared to EUR 102 million in Q2 2019, impacted mainly by lower prices [ and lower volume in previous year ] and [indiscernible]. We have to take into consideration that the comparator is ample, [ therefore increased ] paper prices that increased, and this increase was implemented last month during H1 of '19. Of course, lower paper volumes also impacted Q2 '20 performance due to the production reduction following the economic lockdown. We managed to offset 37% reduction in paper volume with a 79% increase in pulp volume and 10% increase in tissue. But still the overall volume impacts was negative. One of the key aspects to mitigate the negative impact of the pandemic was cost improvement, which of course is variable costs, namely external fibers, both soft and [indiscernible], wood and chemicals, but also in fixed costs, especially in what we call sanctioning or recovery costs. Looking at the overall semester on Slide #8, EBITDA on the first half totaled EUR 140 million versus EUR 207 million in the first half of '19. We reached EUR 88 million in Q1 and EUR 52 million in Q2, with the main negative impact being clearly price performance. During this first half, net pulp prices remained at a very low level, while paper and tissue prices showed a higher resilience but was still impacted negative. Average pulp prices fell about 34% year-on-year. Average paper prices were down around 7% and tissue had a minimum decrease, showing its resilience of less than 3%. The strong volumes in pulp and tissue balanced the decline in paper sales and also the positive performance in costs was key to this first half performance. The main factors optimizing variable costs were those of external fibers. Thanks not only to price reductions on fiber but also to reduction in specific consumption in the expenditure on wood, due in particular to lower specific consumption in the period as well as in lower cost for chemicals, essentially due to lower prices for certain products and mainly reduced specific consumption in areas of the [ mills ]. Significant work has been done to reduce levels of -- in consumption over the period, taking advantage of the slower pace of production, despite the instability that these shutdowns and changes in operating speed can cause. We have also achieved some gains in renegotiating contracts of raw materials and the [ subsidiaries ]. On the fixed cost front, we managed to achieve a reduction of around EUR 22 million below the level recovered in the same period in '19 with positive evolution in personnel costs and sanctioned corporate costs, in particular, in the cost of these aforementioned corporate areas. This solution was in line with the cost reduction plan announced in the first quarter for an estimated reduction of EUR 46 million in 2020. I will now ask Nuno Santos to give us a few words on the market conditions. Nuno, please?

Thank you, António. Good afternoon to all. On Slide 10, we have an overview of pulp and paper price evolution over the last 6 years for the main price index in Europe, A4 B-COPY and Bleached Hardwood Kraft Pulp in euros. This slide is quite clear, showing the current phase we are in. Pulp prices are at their lowest. With market discount increasing in recent years, prices are probably at the lowest level since the beginning of the [ 2019 ]. Paper prices, on the other hand, have been quite resilient but are nevertheless down 6% year-on-year. So going over to Slide 11, we have a brief overview of the pulp market. The pulp market was quite resilient during the first half of 2020, with demand and supply impacted by several events. On the demand side, worldwide pulp demand grew 8% year-to-date May 2020 versus the same period last year, with significant increase in Latin America, 22% growth; Africa, 18%; Eastern Europe, 10%; and China, 12%. Most of the growth due to hardwood pulp, which grew 13%. Overall, the growth in tissue more than compensated the reduction in printing and writing. On the supply side, there was a strong rebalancing reduction of producers stocks, which started at the end of 2019, from 65 days of stock in June of last year to 49 days of stock in June this year. There were various unplanned stoppages and production cuts, for example in short fiber plants from Asian producers and in Finland labor strikes in the pulp and paper industry. Overall, prices were mostly stable during the first semester. PIX Benchmark for BHKP, Bleached Hardwood Kraft Pulp, in dollars remained stable in the second quarter at $680 per ton equal to the first quarter of this year, but falling 30% year-on-year. The demand erosion from the graphic paper industry and the reduction of tissue consumption in May and June has led to some adjustments in current market conditions. Prices have been under pressure as the traditional weak summer period starts, although we do not anticipate significant changes in the short term. Current market prices are likely below cost for some marginal cost producers and below cost of integrated Chinese mills, signaling that the bottom has been reached. Several maintenance stoppages that were delayed due to COVID-19 restrictions will remove capacity in the second half of this year at a time P&W production starts to improve from very low levels in the second quarter. João Paulo will now comment the paper markets.

Thank you, Nuno. If we now go to Slide 12, we have an overview of the uncoated woodfree market during this first half of the year. We have seen that the uncoated woodfree has been severely hit by the impacts of the lockdown measures implemented across the world. Estimates point out to an accumulated downturn of approximately 13% year-to-date May in the global uncoated woodfree market with particularly sharp reductions in April and May, accounting 24%. In Europe, the estimated accumulated reduction is 14%. And in the United States, the figures point to a more significant downturn of around 20%. May appears to have been the worst month in the terms of falling in coated woodfree demand, down to 34% year-on-year, with the tendency for recovery already visible in June, down 19% year-on-year. Still, uncoated woodfree demand was more resilient than demand for other types of graphic papers with coated and mechanical grades falling 18% and 19%, respectively. Despite the strict lockdowns imposed, working from home and home schooling, the severest impact was felt by the printing industry segments, with the downturn in advertising and commercial printing, which particularly penalized sheeted business. Reel business proved more resilient and has been more versatile than in terms of uncoated woodfree applications. There were also significant variations between European market. Consumption fell less in countries where measures were not as severe, such as Germany, Sweden and Holland than those where strict lockdowns were enforced such as United Kingdom, Spain and Portugal. So many producers across the world reduced paper production during this period and that included Navigators. We decided to manage our paper output over April, May and June, in line with the downturn in demand, thereby controlling our stock levels. Between late March and late June, we managed to reduce our stocks by around 19% versus 6% among our competitors. Paper prices remain pressured throughout this period by the low pulp level as well as by market conditions. The benchmark index for A4 showed a downward adjustment of 6.4% year-on-year to an average price of EUR 855 per ton as compared to EUR 903 -- EUR 913 per ton in the first half of 2019. Price fell 2.2% from Q1 to Q2 in 2020. Let's go over to Slide 13 with the group's paper and pulp performance. Uncoated woodfree sales dropped 17% year-on-year and 37% quarter-on-quarter, following the referred production curtailment. With paper prices down, as we just saw, paper turnover totaled EUR 468 million, reflecting a 23% fall year-on-year. We believe the bottom of this crisis was reached in May and already in June, we started to see some improvement in market conditions. We reacted very swiftly and adopted large package of innovative measures to support our wholesalers and their sales teams in different parts of Europe and around the world. These measures proved to be successful as we ended the first half with an order book of 30 days, which compares to an estimated average of 18 days from European competitors. Our current order book continued to improve in the last weeks, and we have now an order book representing one of the highest levels for this seasonal period in the past 11 years. So to comment on the pulp performance, I will hand over to Nuno again.

Thank you, João Paulo. Our market sales volume in the first half reached 193,000 tons, and this was actually the highest level since 2010, after we started the fourth paper machine in Setúbal and the site became fully integrated into paper. At the time, we decided to maintain our drying capacity. This has proven to be a sound decision as in the context of adverse market for paper, we have the flexibility to increase our pulp market sales. We were able to reactivate our clients and recover sales in Europe and in new regions, exploiting opportunities in the tissue and packaging segments. Sales turnover reached almost EUR 80 million, improving around 3% year-on-year amidst the context of low price environment with price falling 27% year-on-year, as mentioned previously. Let's take a look at the tissue performance on Slide 14. Global sales stood at 52,000 tons in the first half, reflecting a 10% year-on-year increase. This was sustained by strong sales in reels, which offset the decline in finished products, impacted by the contraction of the away-from-home segment due to the COVID-19 pandemic. We reached EUR 70 million in sales turnover for the first half, growing 7% year-on-year. Prices showed a significant resilience throughout this first half and when comparing second quarter against first quarter, prices for both finished products and reels actually increased. The average price between quarters is affected by the mix effect for the increase of weight in reels versus finished products. In terms of industry activity, we had a good performance in the period in both the Aveiro and Vila Velha Rodão mill. And we managed to improve our fixed costs. The margin in our tissue business in each different segment is now clearly a lot closer to what we believe we can achieve in this business. I will now hand over to Adriano, who will comment on the CapEx side.

Thank you, Nuno, and good afternoon to all of you. On Slide 15, we have an overview of the CapEx in the first half. In our previous call, we refer that we would revise our CapEx plan for 2020, significantly down from EUR 158 million to around EUR 70 million. This represents a very significant reduction as we only have maintained maintenance and projects start in the previous year. So in this first half, we recorded around EUR 48 million of CapEx. Actually, this amount includes some payments referred to 2019 projects. Maintenance, efficiency improvements and other items represents EUR 24 million. Investments in environment totaled EUR 13 million, and we also registered around EUR 12 million in core business improvement. The most significant environmental CapEx project in 2020 have included construction of a new biomass boiler in Figueira da Foz and [ related equipment ], with a total investment of EUR 55 million over 2019 and 2020. The new boiler is due to start operation in the second half of 2020 -- actually in August 2020. This project will make it possible to cut CO2 emissions at this unit by 81% and by 20% for Navigator as a whole. Reduction in the order of 155,000 tons of CO2 per year. As a result, the electricity consumption in the mill will be 100% based on renewals. I will ask Fernando to make the next comments. Fernando, please.

Thank you, Adriano. On Slide 16, we have an overview over the free cash flow evolution, which was particularly strong in the semester and reached EUR 114 million. Considering that free cash flow in the first quarter of this year has stood at EUR 15 million, the increase to EUR 99 million in the second quarter was significant, precisely at the time when the full impact of the pandemic was being felt. As already highlighted, this was achieved through highly effective management of working capital, which, combined with strong ability to convert customer accounts into cash and a careful management of suppliers, where extension of certain payment periods was combined with the provision of financial solutions to support liquidity of our partners. The lower CapEx as well was important -- it was important as well, but the most relevant factor was the conversion of client receivables. We also working reduction inventories of pulp and paper products and actually increased wood stocks in approximately EUR 25 million in order to support forest producers in Portugal and mitigate the impact of the reduction in the activity during the more difficult times of the pandemic. The main trend in the evolution of free cash flow over the first half of 2020 is quite aligned with the Tier 2, as you can see on Slide 17. This strong free cash flow generation translated to a significant reduction in net debt over the period. As you can see on Slide 18, at the end of June, net debt totaled EUR 700 million, excluding the impact of IFRS 16, representing an increase of EUR 15 million over year-end 2019, but almost EUR 100 million [ Q2 versus ] quarter 1 2020. The net debt-to-EBITDA ratio remains at a conservative level of 2.3x, excluding the impact of IFRS 16. The group's debt profile is referred on the next slide. Our short-term liquidity was increased to EUR 317 million by the end of June. We have already repaid some of the short-term lines contracted in March and April and have EUR 95 million in additional backup lines available currently. We have no significant repayments before 2021 and have already secured the funds needed for those repayments. Our average cost of debt remains very competitive at 1.58%, and most of our debt has a fixed rate. We believe that Navigator maintains a strong financial strength. I will now hand back to António.

So going to Slide 21. We have an overview of the first half, and I'd like to emphasize a couple of items. The pandemic situation had a significant impact across the world and caused a severe decline in paper consumption. We acted swiftly by managing our transaction of goods, avoiding inventory buildup, avoiding further price erosion and preserving working capital, but also we are working all different [ goals ] with our key distribution partners, launching innovative tools and innovative incentive mechanisms to help them selling our own products. We have also proven to have a more diverse business model than before. That has proven to be quite resilient to adverse market condition, has [indiscernible] activity in [indiscernible]. We have acted decisively on the cost side and protected our margins, generating, once again, a significant amount of cash. We have maintained a strong financial standing, as Fernando just said. And we are seeing recovery signs in the market, and we believe we are well prepared for the fall season that has just started. Let us go on the Slide 22. This shows our reaction to the COVID-19 pandemic. First and foremost, our priority was the health and welfare of all our people, and we are proud to say that with the good [ actions ] very early, already in February, they proved to be effective and the level of positive cases within our group was extremely low. Also, the commitment of all our employees and key suppliers was exemplary. And thanks to the hard work and dedication of the entire workforce, as well as the work of our partners, it was possible to react swiftly and efficiently. We established 4 decisive actions to protect our business that were presented in the last call. Regarding suppliers, we wanted to balance mill's needs while also securing our suppliers' activities. We did that by providing financial solutions to support the mobility of our partner. We had a special concern regarding our national suppliers group, both forest owners and service providers and as Fernando referred, actually increased wood stocks in approximately EUR 25 million in order to mitigate the impact of the reduction activity during the more difficult times of the pandemic. We increased our immediate liquidity in March and again in June, with an amount of over EUR 315 million in cash and cash equivalents. We have new ones renegotiated, and we have already [ paid the short-term loan ]. We have also already secured our needs for the next repayments in 2021. In terms of CapEx, we revised significantly down our initially planned CapEx from EUR 158 million to around EUR 70 million, postponing noncritical CapEx. We registered almost EUR 49 million in CapEx in the first half of the year, although part of that amount was related to CapEx [ invoiced ] in '19. This implies that the rate of CapEx disbursed in H2 is expected to be lower than in H1. We've also reinforced the targets of our cost reduction programs in defining an ambitious fixed cost target selection of EUR 46 million for 2020 in the first half, as we have seen we have already achieved EUR 22 million, proving that we are committed to achieve these targets. We will also work on our variable costs, including specific consumption and renegotiating prices of input, and we'll try to continue to do so in the next semester. Finally, a few words on the outlook for the rest of the year on Slide 23. We are seeing a progressive recovery in the uncoated woodfree business in Q3. Current environment is still very uncertain and very volatile, but our order book is significantly better now, and we feel well prepared to face each. We will continue our commercial efforts on the pulp side, albeit we have less market pulp available as the paper mills are all back to normal operations. We expect to continue to deliver the group's operating and commercial performance on the tissue front as well. Thank you very much.

Thank you. We have now reached the end of the presentation, and we are now open for the Q&A session.

[Operator Instructions] Our first question comes from Bruno Bessa from CaixaBank.

Yes. I will start with the CO2 emissions and the investment you've made. In Setúbal, I think you've mentioned that this investment will allow the unit to reduce by 81%, the CO2 emissions, and by 20% for Navigator as a whole. My question is considering the new legislation in terms of CO2 emissions to come in force in 2021 with an expected reduction in terms of the CO2 allowances for each company. And do you believe that this investments may then -- the 20% decline in terms of CO2 emissions expected at the consolidated level will be able -- will be enough to offset the change in the legislation? Or do you think that you will still be impacted by this change in the legislation? This will be my first question. And the second question. Regarding the improvement that you've seen in terms of backlog until the month of July, if you could provide us a little bit more visibility on the drivers behind this improvement in terms of backlog because it is true that the worst of the pandemic seems to be behind, but with school still closed and many people still working from home, I imagine that paper demand is not quite broadly enough in order to support this backlog improvement. So if you could provide a little bit more visibility on this, it will be appreciated. And also last question, if I may. Regarding the tariffs in the U.S., we have been many, many changes in the tariff apply to Navigator. My question is, what will be the next chapter in terms of the U.S. tariff? And what will be your expectations in terms of any potential changes in the tariffs currently in place? This will be my 3 questions.

Okay. Thank you very much for your questions. I will make some introductory comments to the 3 questions, and then I will ask my colleagues to provide a bit more detail, knowing, of course, that we do not give any [ guidance ]. Regarding CO2 emissions, I'd like to just correct something on Setúbal. What we have mentioned is the biomass boiler in Figueira da Foz, not in Setúbal, as you have said. So what we are finalizing and starting very soon is the biomass boiler. I also would like to remember that we have announced last year, a decarbonization plan to reduce our CO2 emissions until 2035, so 15 years below the announced commitments from Europe. And then we are keeping growing in the same plans. So we are pursuing pipeline to achieve the same result in 2035. My colleagues is around, will give you further comments on this. Regarding the improvements on backlog. I'd like to remember the following discussions that we had in previous sessions. The paper supply chain is relatively long. And the impact of demand on the end consumer is typically amplified upwards and downwards by distribution channels. What we are seeing now, we believe, is not only a recovery in demand on the end consumer, end use, but also the fact that the distribution stocks need to be replenished because during the period of lockdown and the fact that during many weeks, we were not supplying not even close to the volumes that were normal. The stocks of our distributors went down. So part of this should be stock replenishment. And the other part, of course, is recovery of demand. Again, my colleague will probably give you further comments on [ initial sales ]. Regarding tariffs. The next chapter, as you probably know, this is a process of at least 5 years. We are now entering, we are starting the last of the 5 years period. And then after each 5 years period, there is a sunset review. So we are looking forward to the sunset review, which will happen next year, so when we conclude the first 5 years. So we never know what is the tariff year-on-year. It's calculated based on the analysis made by the department of commerce. So we never know what is -- what are the details. What we know is the following: the U.S. rule of law and the system works is a country where the rule of law works, is a country where the system works. And every time, we have been able to prove that we don't feel is a fair level of -- first of all, we don't accept that we are dumping paper into the States. States is by far the country with our highest prices in the world, so we completely refuse that we are dumping paper into the States. And every time you see us apply the tariff, we have been able to prove that the tariffs in the end is actually lower than what's also initially applied. We expect to keep this track record for the future. But I would like to ask Adriano to make some comments on CO2 emissions for the future, and mainly 2021, please.

Okay. So as António said about the biomass boiler is implemented in Figueira da Foz mill and will allow us to put on hold, so not operate CHP plant-based on natural gas. And with that, we've reduced very much the emissions on that. We have also big decarbonization plan, which allows us to be carbon neutral in 2035. So we will reduce from 730,000 tons of O2 per year in 2020 to less than 100,000 tons in 2035. And this emissions will be mitigated by our actions, mainly in forest side.

João Paulo, do you want to comment something further on the order book, please?

Yes. We have -- we entered the COVID impact in March with the highest order book or one of the highest order books ever and that helped us to go through the months of April and May. Meanwhile, we have implemented some incentive schemes, mainly supporting our customers in this very difficult phase. And the customers rewarded us with new orders that brought our order book to a level that is, again one of the highest for the season. Normally at this time of the year, there is a slow run in terms of market, but we are experiencing a good return, of course, not knowing whether this will be stable or not because no one knows what the future will be. But at the moment, we are seeing positive upward trend.

Yes. Thank you, João Paulo. And then on tariffs?

On tariffs, the only thing I should -- we should add, I can add is the fact that we always have -- we are monitoring the tariffs that is applied each month in our accounts. We have some calculations, and we try to calculate the impact on those tariffs on the income, first thing. Second thing is the fact that the U.S. Department of Commerce established some rate that we think is higher than our rate. We try to [ decide ] on the grounds of the law. And unfortunately, we were hit on the first period of reference that we already [ closed ] . The POR1, you remember that we start with 0 that afterwards increased to 57.59, I think, and reduced to 1.75%. And finally, was closed with 1.63%. This means the last decision was the decision of the court. The court could be this decision will be fought against by our competitors. They have 60 days to do it and provided they don't contest, we'll receive in the next 6 months, the amount already provided as a [ caution ] as anticipated [ deposit ] and this will benefit our cash flow of EUR 25 million. This is depending on the fact that the competitors will contest or not. And by -- our expectation of 6 months, this will impact our accounts only next year, for the time being is our guess. What concerns the POR2, once again, the rates established by the Department of Commerce was higher than the final rate. Final rate was 4.37%. It starts with 5.96%. This means that we are in condition to fight. We have grounds to fight. We believe on the courts and the restrictive authorities of the U.S. Now we are giving information about the POR3. POR3 is starting 1st of March 2018 and then 28th of February 2019. We are expecting the decision, and we have only last month provide the information request by the administrative authorities. By the end of 2020, February and POR4, we are -- once the tax authorities and administrative authorities ask us, we'll be -- supply the information. Now last February, start [ the 50 per year of investment ] and after this, we'll try to apply for a sunset. But normally, this doesn't -- the companies cannot achieve this, but the -- nevertheless we have to at least try for the next year, if needed. But I want to say, it's -- we have this fully provided in the accounts, and we will -- provided there is no surprises, or if there are surprises, we are [indiscernible].

Next, we have a question from António Seladas from A|S Independent Research.

My question is related with your pulp volumes sold. So they have been increasing for the last 2 or 3 quarters. So my question is, should we see more of this in the future? Or that was just related because now you are selling less paper, less office paper, and now you are taking this opportunity to sell pulp. So should we see more of this in the future? Or it's just an opportunistic way to sell pulp that is not employed in paper office -- in office paper?