The Siam Cement Public Company Limited (SCC) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to SCG Analyst Conference for the First Quarter 2020 Results. As you can see from the format of today's conference, we're adapting to the change. We're doing this a bit differently today compared to normal, but it allows us to carry on and provide you with result clarification and business update with our management as usual. Kindly note that while our program is on, you'll be muted. We do this to try to keep background noise to a minimum, and we'll open the floor up to questions after the management speaks. Last but not the least, should assume session experience system and network problem, please dial into the telephone number provided in your email. The meeting will in that case continue on conference call. Now onwards to this afternoon's program. Today, presenters are as follows. Beginning with the consolidated results, the CEO of SCG, Khun Roongrote Rangsiyopash. The financials will be highlighted by the CFO of SCG, Khun Thammasak Sethaudom. For the business units, beginning with the President of the Cement Building Materials Business, Khun Nithe Phatrachoke, and he will be supported by Khun Chana Poomee. Next is the President of Chemicals Business, Khun Tanawong Areeratchakul, and he will be followed by the President of Packaging Business, Khun Wichan Jitpukdee. Thank you. And now on to today's exciting program, beginning with Khun Roongrote.

Well, what a quarter. And to thing that this is just only the beginning, so I'd like to start with this page. This is the summary of the measures that we have taken since the second week of February, when we announced that this COVID-19, we have activated our business continuity management as well as the crisis management measures for SCG. I think 2 fundamentals: One is that in terms of business continuity, the heart of the continuity is our own people. So all the measures are aimed to make sure that we can operate and our people are safe. Secondly, in terms of the business, the heart is cash flow. So we have reviewed all the expenses and all the capital expenditures. At the same time, we try to make sure that our priority is, one and the only one is cash flow. So I think this is the measures that we have taken since February and, hopefully, that will allow the SCG to be resilient throughout these challenges and emerge much stronger whenever this crisis finishes. In the first quarter, our sales revenue was THB 105.7 billion. Actually down 6% year-on-year, but relatively stable from the previous quarter. I think this is mainly because of the chemical prices. In terms of EBITDA, EBITDA was down 21%. And again, this is coming from the decline in the chemicals margin. If you look at the first quarter, HDPE-Naphtha compared to the first quarter of this year, the margin actually dropped by 30%. Equity income, both nonchemicals and chemicals, Chemicals were down significantly. That's in line with the decline in the margin. In terms of profit, we reported a profit of THB 6.9 billion in the first quarter. That's already taken into account of the tax -- deferred tax in Indonesia, where the tax rate was reduced from the 25% to 22%. At the same time, we had some loss from the Indonesian rupiah depreciation as well as the stock loss in Chemicals. In terms of the segmentation, as you can see that Chemicals as a percentage of the total revenue declined, and that's mainly because of the price of the chemical products. Packaging was 23% and Cement-Building Material is 41%. In terms of profit, as you can see here, Chemicals now account for 26% of the profit for the group, Packaging is 24%, and Cement-Building Material is 40%. Whereas the other 10% is the income from the associated companies. In terms of the segmentation, you can see here the decline in the export segment to China and Hong Kong, and that's mainly because of the COVID-19, where the demand was wiped out in the first quarter in China, so that was the big drop. At the same time, the demand in ASEAN continue to be quite stable, I think, mainly because most of the market in ASEAN really didn't feel that much of the impact of the COVID yet with the exception of Philippines. Now I'd like to pass it along to Khun Thammasak for the financial portion.

Good afternoon, Khun. I guess that this time, we will have to speak a lot on the finance. So let's start with the EBITDA on asset. As usual, you see the declined the ratio to 11.2%. And this is because of the Chemical gap, as Khun Roongrote mentioned. Our EBITDA margin still stood at 14%. For net debt on EBITDA, it's increased to 2.7x. And if you look at excluding the project under construction, it's 1.9x. So basically, there's an increase in debt from the major project. For the capital expenditure, we spent THB 12.3 billion, mainly for our petrochemical complex in Vietnam and Naphtha polyolefin debottlenecks in Thailand and also the paper plant in Philippine UPPC #3. Just to remind you that of the major projects, either LSP, MOC debottlenecks or the UPPC #3 of the loan already fully secured, 100% secured. So with the high -- current high uncertainty situation, we take a very prudent step to review of the CapEx, and we delay some of the projects. We cut spendings. Later on, I have figure of the estimate for capital expenditure that we forecast for this year. Further, interest expense and finance costs stood at THB 3.1 billion. This is a little bit high when you look at the figure. If you dig down into the detail, you could see that 1.3 billion, it's come from the FX loss of the -- our subsidiary in Indonesia, who holds U.S. dollar loan. This is the accounting underlying loss. If you exclude those FX loss, which we call it financing costs, you're going to see THB 1.8 billion. This is a little bit higher than last year, but still quite normalized In summary, EBITDA generation, THB 15.4 billion, still quite robust, as you can see. And we hold quite a lot of cash at the moment. Cash and cash under management has stood at THB 84 billion by the end of the quarter. For working capitals, we manage inventory tightly and carefully watch out the account receivable, account payable to maintain high liquidities. For outlook this morning, Board of Directors already approved to hold the AGM for June 8. And May 13 will be the record date. For capital expenditure, we used to give the guideline of the THB 60 billion to THB 70 billion and the revised guideline for this year is THB 55 billion to THB 65 billion. This is as of now. We still have flexibility to further review, if necessary okay. You will see that some of the business still quite okay. So basically, in all of the crisis, there are still some opportunities persist. For the debentures, we closed THB 25 billion debentures just this month, and this is oversubscribed. So we still receive a very high confidence from the investor. The second lot, another THB 25 billion will be rolled over by the end of the year. For SCG Packaging IPO, we're still under the process. We submit all the documents and waiting for approval from the SEC. But of course, during the COVID-19 outbreak, we could not go out and really have a face-to-face discussion with the investor -- potential investor. So we experienced delay from these marketing activities. So we will keep you updated on this. For FX, still, but still very volatile. And if you compare Thai baht, U.S. dollar against the last year, baht depreciated. And this is the benefit to SCG bottom line because we are net earning in the U.S. dollar. That's all for finance, Khun.

Good afternoon, Khun. I would like to start with ASEAN market. In this quarter, the COVID outbreak have affected partially to ASEAN market and expected to see a full effect in next quarter onward. Cambodia cement demand still grew 9% year-on-year. As a result of continuous growth of Chinese investment, Indonesia's cement demand was flat year-on-year because some local infrastructure projects were delayed and some building material shops have been closed according to the COVID outbreak. Myanmar cement demand decreased 4% year-on-year, primarily due to the lower government projects. Vietnam cement demand declined by 6% year-on-year because of a continuous tightened property loan control. Thailand market. In general, the market situation in Thailand was under pressure from a decrease in purchasing power due to the ongoing drought condition and COVID-19 outbreak, and also the delayed Budget Bill process. Grey cement demand decreased 5% year-on-year. Cement demand from residential segment declined 3% year-on-year due to softened domestic demand from the drought that pulled our purchasing power in provincial area and COVID outbreak that slowed down economic activities. Cement demand from commercial segment declined 5% year-on-year because of lower private investment on construction. Cement demand from infrastructure segment declined 7%. This is lowest in many years, as a result of the new infrastructure projects were postponed from the delayed Budget Bill. The government spending on capital expenditure in the first 2 months of this year declined significantly. Ready-mixed concrete demand contracted 7% year-on-year. Housing products demand dropped 13% year-on-year, in line with ceramic tiles demand that dropped 11% year-on-year. Revenue from sales. Revenue from sales this quarter decreased only 4% year-on-year despite the overall demand slump from the COVID-19. EBITDA and profit for the period of this quarter decreased 2% year-on-year as a result of weak demand. ASEAN ex Thailand and Other sales segmentation. ASEAN and Other sales growth was resilient at last year's level despite the softened demand across ASEAN, thanks to higher export sales volume. The adaptive and resilient supply chain management is the key strategy in this situation. We have responded quickly to the market when the demand declined by exporting more to the countries that have already recovered from the COVID-19 in order to stabilize and optimize our production. Thailand sales segmentation. Domestic sales for this quarter decreased 7% year-on-year, a result of weak domestic demand from all segment due to the delayed government Budget Bill, the ongoing drought crisis and also COVID outbreak. Despite the market demand have been under pressure, the service and solution sales this quarter continue to increase to 5% on sales. The increasing service and solution sales help to balance our revenue stream in the midst of the difficult situation. We have 2 key strengths that are differentiated from others. Firstly, we have the multi-location of operation plans across the country. Secondly, we have the most comprehensive distribution network with more than 600 authorized dealers and more than 7,000 sub-dealers nationwide. This key strength can help to prevent supply chain disruption. For ceramic tile, all markets. Sales volume of ceramic tiles decreased 15% year-on-year, largely from temporary closure of the operation in Philippines by the government's order and ceasing some production plants in Indonesia as well as a weak demand from all markets. The outlook. The demand for cement and building materials in ASEAN and Thailand are expected to remain poor for the rest of 2020. The recovery of cement demand in Thailand will be led by the government spending on the infrastructure project. The company updates. SCG Boonthavorn has established the first flagship store in Cambodia with total investment of THB 383 million. SCG distribution has entered to a joint venture agreement with BUILK to establish an integrated technology service company to provide cost control management system, B2B e-commerce platform and customer relationship management system in the Philippines. The transaction value is approximately THB 15.5 million. These 2 new investments are following our strategy to expand our active omni-channel to ASEAN countries. This quarter, we also opened 2 new retail franchise format stores in Ubon Ratchathani and Buriram Province. Now we have operated 13 retail franchise format stores in total and aim to have 20 stores by the end of this year. SCG Home online is the e-commerce platform that has been launched since fourth quarter last year and has reached 4x Q-on-Q sales growth in this quarter. The last one, measures against the COVID-19 situation. We have prepared 5 key measures as follows. First, employee and customer protection is the measure to ensure that employee and our customer are staying safe from the COVID, by implementing physical distancing, work from home and setting a screening process to prevent COVID spreading at factory, office and retail stores, also in our customer sites. Secondly, resilient operation, we have prepared and arranged adaptive supply chain in order to prevent a disruption and flexible production plan to optimize production capacity in case of declining demand. For example, we have searched for a new market to export more when the domestic demand declined in order to maintain our utilization and stable our operation. Thirdly, it's efficiency enhancement. We address near-term cash flow management, reducing inventory and cutting unnecessary expenses, reducing operation costs by digitization, automation and Industrial 4.0. Fourthly, we defend against declining sales by speeding up the implementation of active omni-channel and service solution to penetrate small-scale project segment and adjusting product portfolio or to fit our customer demand. We have relocated our resource primarily to shifting our staff from modern trade PC to accelerating online sales. Facebook Live is also becoming an effective selling channel under this situation. Last one, for social responsibility, we would like to help Thailand to pass-through this crisis by cocreating with hospital to develop the innovation -- innovative equipment to prevent against the spread of COVID-19 virus, which include the first one: modular screening and swap unit innovation that provide air tightening system, indoor air quality, and also we use the technology from SCG Home. This allows medical professionals to work faster and handle a higher number of patients per each round. The second one, telemonitoring equipment, which also -- we use this as innovative to develop the living solution with decreased frequency of contact between the professional and the patient. The equipment utilize the Internet of Things technology in order to follow-up health in remote area and in real time. That's all from our Cement and Building Material hub. I would like to pass to Khun Tanawong.

Good afternoon. For the Chemical business in the first quarter, I think that like Khun Roongrote and Khun Nithe mentioned during the COVID situation what we have -- what we did, what we're doing now, I think we try to make sure that we can keep our operations. And at the same time, we try to maintain our supply chain. And in terms of market situation, I would like to give you a quick summary. And after that, I will explain in detail. For -- like I said, many things happened in the first quarter. I think not only COVID in terms of the feedstock, you may have heard that crude oil price sharply declined. I mean, in March, after OPEC and non-OPEC, they -- I mean they cannot agree and they cut the price. And at the same time, they ramped up their production, so that's why the crude price declined. And similar to Naphtha, Naphtha price dropped in March. And also the gasoline demand market also quite weak. And when we look at the PE and Naphtha gap, if we look at even on the quarterly basis, we can see that gap seem to be better, but I will show you in detail month-by-month and PP and Naphtha gap also at the same. PVC and EDC and C2 gap more or less stable. And MMA and Naphtha gap improved, again, from the lower feedstock price. And butadiene and Naphtha even though the feedstock cost is a lot lower, but the BD demand still not good. I mean, it's still weak. If we look at the PE Naphtha price, you can see that, I try to show you that January, February and March, like I said, the crude oil price declined in March. So it means that January, February, the gap is not that high during those 2 months. And at the same time, you may know that we -- typically, we have to carry the feedstock from the previous month. So you see the situation for PE and Naphtha gap, and similar to PP and Naphtha price gap. January and February, we can see that the gap improves. And in March, the gap went up to $635 per ton, so similar to the polyethylene that I mentioned earlier. And look at PVC and EDC and C2 price gap. PVC price quite stable from strong demand in India and Southeast Asia, but the sentiment in China is quite soft and due to the COVID impact. And in terms of gap, actually, the gap compared Q-on-Q slightly declined. Benzene, Toluene. In the first quarter, if we look at Benzene, we can see that first quarter, the gap is quite, quite okay. And due to the limited supply from China refinery when they have a shut -- I mean, lockdown. And also we have higher demand from the U.S. market, so that's why the gap is quite okay for Benzene. Toluene, also the gap is, compared to fourth quarter, still more or less the same. For MMA and Naphtha, the gap improved -- slightly improved again in March when the feedstock price decreased, but at the same time, the demand was still weak for MMA. Similar for BD and Naphtha. Actually, even though the Naphtha price decreased, but BD demand is still weak, so the gap is more or less still not improved compared to the fourth quarter. In terms of polyolefin sales volume. In terms of sales volume, we can say that sales volume declined 8% Q-on-Q and 11% year-on-year. And actually, the majority came from the -- we have to build up inventory for the turnaround. Actually, we plan turnaround in May. So this is one of the reason that we have to keep the inventory. Another problem is that we have a small production loss from the power outage in February, so this is some problem that happened in the first quarter. And PVC sales volume actually slightly declined around 3,000 ton and it mainly came from the unplanned shutdown for 3 days for the VCM plant. Financial revenue decreased 7% Q-on-Q and 17% year-on-year from lower product price and sales volume. And a look at EBITDA, decreased 73% Q-on-Q and 64% year-on-year, and mainly from the -- actually Q-on-Q from the lower dividend and sales volume that I mentioned earlier, and also from the lower margin. Actually, when we look at the margin, there may be a question that if we compare Q-on-Q, the margin seem to be okay. But like I mentioned earlier, that the margin just improved in March, and we have the feedstock that we carry from the previous month, so that's why the -- we have a lower margin. And at the same time, we have stock loss in this quarter, as Khun Roongrote mentioned. In terms of profit, profit reduced 37% Q-on-Q and 70% year-on-year. And actually, mainly from the lower equity income and but for the subsidiary, it improved, and as profit shifted more to the downstream. Outlook, what we -- I will say that now the crude price still is quite volatile. And we believe -- we think that during this situation, I mean, the COVID impact, the oil price will maintain at a low level. And similar to Naphtha price, we will follow the crude oil price. Polyolefin. Actually, polyolefin is, like I said, it's happening just not only in the outlook, but in the first quarter, we -- during the COVID, you can see that there will be a significant impact in terms of demand and supply. In terms of demand, due to the lockdown situation in each country, the demand also declined depending on the segment. For example, like automotive or durable good, the demand declined. But other segments like packaging or material handling, the demand is still okay. So what we did in the first quarter and what we plan for the next quarter that we have to follow-up the situation closely. And make sure that, for example, now we see the demand in the western part quite weak. But in Asia, especially in China now, the demand seem to be recovered and we have to identify the opportunity that we can sell our product in each segment and each country. So this is polyolefin situation. For PVC, the demand is expected to be under pressure from the COVID impact. And especially in India, that they have lockdown situation, so hopefully, that when -- if they open again, I think the demand will come back. Another outlook that we would like to share is the drought situation. Now actually, what we collaborate with the government -- actually, the private sector, I mean all company in Rayong and the government sector, we have a very good collaboration since the beginning of the year, and we try to -- we put many men -- I mean, action. For example, that private sector have to do, we have to do water saving project. And at the same time, the government and private sector collaborate with water connectivity that we would like to make sure we can -- this is like a mitigation plan for the situation. So we have to follow the situation closely and try to have a good mitigation plan. For the company update, like I mentioned earlier that we plan to have MOC turnaround in May. But typically, if we have turnaround, normally, we're talking about 4,000, 5,000 staff for the turnaround period. So this is quite difficult to control. If it -- we have a concern on the COVID working condition, so now we tentatively we postponed to fourth quarter. So that's all I have for Chemical. May I pass to Khun Wichan.

Good afternoon, Khun. Next will be Packaging business or SCGP in the hub. Whenever there is a challenge, there is also an opportunities. May I start with the Thailand overall market. The consumer demand, especially for hygiene product and food export, online shopping and food delivery in Thailand has been going up and positive approach, gained market in the first quarter. However, for the electronic and electrical appliances, automotive and alcohol beverage, demand has been down at the end of the quarter. For Indonesia, consumer demand, this is stockpile of the panic buying. And again, E&E, is same as in Thailand, because of the supply part from China has been dropped and that made this industry a bit negative in this quarter. For Vietnam, seem to be Vietnam is the best in this region because of [ the awareness ], especially for the COVID-19. Consumer demand and the relocation of the China from China to Vietnam has helped a lot in the demand in Vietnam. However, the garment and furniture export in Vietnam has been dropped. For the Philippines, this almost negative because of the government has been declared, they're fully locked out, especially in the Luzon Island since March 15. Because our factory in the Philippines has been shut down for a month from March 19 and now has been starting up from March -- April 22, this month, already startup because of we can get -- we got the permit to operate now. And the export, especially fruits from the Philippine has been down also due to the containerless friction. In Malaysia, also the government also declared lockdown. However, our factory, food packaging factory in Malaysia still can be operated. Business continuity plan. For people, we focus safety on our people, customer and all the suppliers. For business, we do stabilize supply chain, especially for the business tracking and scenario planning and also secure the raw materials. We also make our production flexibility to serve customer demand, especially in the peak demand. And it's very important that we ensure hygiene standard product to stabilize our food-grade production and 100% to serve the customer. For the project update, we have to ensure that the project implementation can be continued. Now in Vietnam, polymer packaging plant 2 progressing 97%. However, due to the restriction of traveling of the supervisor to install, this start-up has been shifted 1 quarter, from first quarter to second quarter. For Indonesia, factory to -- in Surabaya, now the progress 83%. And also the start-up will be shifted from third quarter this year to be fourth quarter. And the biggest project in the Philippines, paper machine #3 has also shifted from fourth quarter this year to be second quarter next year. And the progress now are 73% for the Philippines. For society, we also continue to support our front-line workers, especially doctors, nurse and [indiscernible] worker and all the university. For proactive action, integrated packaging chain engage with customer to customize solution because at this point of time, all the customer, they have individual requirement and individual needs. We have to adjust our process and service to comply to the customer, and we did very well in the past quarter. We also -- security of the supply, especially the raw material and the logistics that continue to supply. We do stabilize operation, especially the operational efficiency in Thailand, in Vietnam and in Indonesia. For the Philippines, as mentioned earlier, we also get permit to operate and operationally resume. One thing that we did in our 5 countries, we put all the effort to do the inventory management, while we can give 100% service level to the customer. For the fibrous chain, we ensure good manufacturing practice to guarantee of the hygiene and the standard of our product. One of the good thing of the fibrous chain for this quarter, we performed -- we have a deployed team. Cost saving and lease housing operation has been improved. We can see in the figure red. And we do stabilize operation in Malaysia also. With all the efforts that we did, we could reach the sales revenue on first quarter to THB 24 billion. This is up 15% year-on-year and up 5% Q-on-Q, with delayed current volume, the THB 1.18 million in last quarter. Breakdown by destination. Thailand become 53% from 64%; Indonesia become 15%; Vietnam, 11%; Philippines 3%; Malaysia 2% respectively. And the export is 16%, 2% export to ASEAN country and another 14% export to rest of the world. Next, revenue by customer industry. Fibrous chain total sales account for 17% of SCG packaging, and this is the first time that fibrous chain is below 17% because of integrated packaging become bigger and bigger. And integrated packaging chain account for 83%. From this 83%, if we divide it into customer segmentation, 68% is consumer goods. Last quarter, as I remember, consumer goods was about 63%. This quarter, it come up to 68%. This is because of food and beverage. FMCG has been grew up in the past quarter because of the high demand and also a little bit panic buying from the consumer. The electronics and electrical appliances are still stable. Because in the first 2 months of this year, due to the seasonal surge, the demand was high, but the end of the quarter, it starts falling in the mid of March. The supply chain of it from China has been disrupted at the end of the quarter. The E&E has been down, but overall, our market for E&E, for the first quarter, remained flat. I have to make addition on this one, for industrial packaging, this is a big drop, especially in the automotive, [indiscernible], footwear and textile. Revenue sale by category of the industrial packaging -- integrated packaging chain. Polymer packaging account for 8%, fiber-based packaging account for 31% and packaging paper is still the majority account for 61%. Next will be the revenues by segment of the integrated packaging chain. Start from performance and polymer packaging. First quarter polymer packaging sales, THB 1.6 billion, 33% up year-on-year, and in fact, Q-on-Q. This is because of acquisition of Visy last year and start -- consolidated September last year. For fiber-based packaging, the sales, THB 6.7 billion, this is down 1% year-on-year and up 4% Q-on-Q. This is because of the portion of automotive [indiscernible] and footwear and textile. For packaging paper, the sales revenue are THB 16 billion. This is up 32% year-on-year and up 7% Q-on-Q. This is because of a consolidated of Fajar since July last year. For fibrous chain segment, sales THB 4.5 billion. This is down 15% year-on-year and up 11% Q-on-Q. Performance of the business segmentation for integrated packaging chain. So revenue up 24% year-on-year and up 5% Q-on-Q. EBITDA 46% up year-on-year and 25% Q-on-Q, with EBITDA margin of 22%. Fiber chain segment. Revenues, THB 4.5 billion, down 15% year-on-year, up 11% Q-on-Q. EBITDA down 24% year-on-year and up 355% Q-on-Q. Even the price of printing and lighting paper has been dropped at the [indiscernible] dropped due to the efforts of the cost reduction that helped fibrous chain to improve the operation and end up with EBITDA margin at 10%. So this concludes the consolidated EBITDA and profit for the period of first quarter of SCGP. EBITDA, THB 5 billion, 33% up year-on-year and 35% up Q-on-Q, with the profit of THB 1.7 billion, 7% year-on-year and up 45% Q-on-Q. We have made the note in the table below. Last quarter, we have annualized loss of the initial list in Fajar, Indonesia, about THB 560 billion. Meanwhile, we also get the tax benefit due to the change of the corporate income tax from 25% down to 22%, as Khun Roongrote mentioned earlier. For business growth update and outlook. Latest disclosure, in beginning of this month, we send the intention letter to Board of Directors of Sovi, fiber-based packaging in Vietnam that we want to acquire the chain more than 55% from them, and then to approve to act for the [indiscernible]. For outlook, we still see the solid demand of the consumer-related product. But for durable cost, especially the alcohol beverages will be dropped due to the lockdown policy of the country. Demand of the packaging paper will be a bit improved if the lockdown be released, this is demand side. For the cost side, we see the imbalance of the supply chain, especially in the container, and this will make the higher freight cost for us. Anyway, we -- SCGP will try our best, and we put the best effort to do this and to account and to handle this situation. Last but not least, we are now in the transition to new normal. Now we prepare for the reopen, re-imagination and reform. And hopefully, with the effort, we can continue the performance that are for the SCG Packaging Group.

Just a summary of the situation in the first quarter of this year. I kind of used the word that this is a snapshot of the overall, the crisis coming from COVID. The profit in the first quarter of THB 6.9 billion was the only the beginning of the crisis, even if we had some stock loss and FX adjustment. So the figures actually was higher without those loss and adjustment of the FX. Nevertheless, this is, again, the very beginning of the crisis. I think in addition to this snapshot of the performance, we also show you what we have done so far in terms of the measures that allow us to be quite resilient throughout the past 2, 2.5 months and, hopefully, in the future, in order to meet the requirement and the challenges of this pandemic. I think, as I mentioned earlier, hopefully, that you could see that we have taken very proactive measures in order to make sure that our business continuity remain intact by the very basic foundation of the health of our own employees and stakeholders, together with strong focus in terms of the operating cash flow and cost reduction. Nevertheless, I think, looking at this quarter and the next one, I think there's still a lot of uncertainties in terms of the oil prices, which impacts the cost of the chemicals unit in terms of the demand of the building materials and cement, whether the government step up to put money in the infrastructure like what they should have done, and also the risk coming out from the water shortage in the chemicals unit. So I think so far, this is what has happened to our business. This is what we have done, and I also gave you some of the risks associating with future quarters. Thank you very much.