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

Good morning, ladies and gentlemen. Welcome back to SCG for Analyst Conference for the Third Quarter 2022. We have a lot to update today, and today's presenters comprised of SCG management, led by Khun Roongrote Rangsiyopash, the CEO of SCG; and SCGC management led by Khun Tanawong Areeratchakul, the CEO of SCGC. Khun Roongrote will walk you through consolidated results. While Khun Tanawong will highlight SCGC's operating performance. He will be followed by the President of Cement and Building Materials Business, Khun Nithi Patarachoke who will be supported by Khun Chana Poomee. The financials will be highlighted by SCG's Chief Financial Officer, Khun Chantanida Sarigaphuti. And finally, sustainability will be highlighted by SCG's Executive Vice President, Khun Thammasak Sethaudom. So thank you. And now on to today's program, beginning with Khun Roongrote krap. Thank you.

Yes.Good morning. It's kind of very nice to see all of you once again. I really don't feel like the last quarter was that long. Anyway, a lot of challenges, as you can see from the figures that we presented and disclosed last night, a few factors. I think a lot of you already know about this, but I just want to highlight what has happened again. Basically, the energy cost, if you look at what happened last year and what happened this year after the Russia-Ukraine conflict started in February, the year-to-date Brent actually increased by almost 50%. On the other hand, if you look at just comparing the last quarter of last year and this quarter, we're talking about 20%, 25% increase. So that caused a lot of issues in terms of our cost. Secondly, I think the -- on the other hand, the possible slowdown of the economy as a result of the increased interest rate. I just read the report today saying that the past 6 months, the increase in the U.S. interest rate actually was the highest, the most accelerated in the U.S. history. So that was the big things. Apart from that, chemical cycles went into trough, the utilizations of the ethylene and propylene market globally now is about 80%, which is quite low. That's why we're seeing people in the industry slowdown or cut production quite significantly. And the cost also affected Cement and Building Materials not only the energy, but also electricity and also gas. Apart from that, SCG Packaging still relatively resilient despite of all this happen. In terms of SCG, I think the focus is in terms of capacity management, particularly in Chemicals, and you can get the detail more at a latter part by Khun Tanawong. Cost reduction is another main thing. We have increased significantly the percentage of the renewable fuel. And at the same time, trying our best to improve in terms of the cost of employee in terms of increase in the percentage of automation. CapEx reduction is another thing. We have reduced or delay the capital expenditure by a big part. In terms of pricing, we have raised the price of the products through cost push and at the same time, through introduction of the new products. Nevertheless, in terms of the strategic growth, I think you heard the news about the merger with JWD logistic companies here. This will form the ASEAN, the largest logistics business and platform. SCG Chemicals, has formed a joint venture with Denka in order to reduce the acetylene black. And this is a main component for lithium-ion battery. And we have also acquired packaging material recycling business in Netherlands and also in the U.S. In terms of the consolidated financials, sales registered at THB 142 billion. That's increased by about 8% year-on-year. And the increase is mainly in terms of the price. In terms of EBITDA, this dropped significantly. Like I mentioned, chemicals cycle trough. At the same time, the increase of the cost of energy, has cut down our EBITDA by about 62% Q-on-Q. In terms of profit, along the same line with EBITDA, our profit this quarter was THB 2.4 billion. That's comprised of the inventory loss of about THB 1 billion, and we had book sales gain from the sales of our investment in the auto parts business. As a result, with THB 2.4 billion profit our year-to-date -- our year-on-year profit dropped by about 64%. And comparing to last quarter, our profit dropped by about 75%. So this is quite significant for us. In terms of the first 9 months, sales revenue increased 15%. Like I mentioned, that is mostly in terms of the product prices. EBITDA dropped by about 26% to THB 51.8 billion for the first 9 months. Profit for the first 9 months dropped by about 45%. So that is resulted in the THB 21.2 billion in terms of the net profit. If you look at the sales destination, a few figures that stood out. One is in terms of the using ASEAN ex-Thailand conversations actually improved by about 24%. The total sales of ASEAN ex-Thailand is THB 125 billion. In terms of export, increased by about 6%. And again, this is not because of volume, but because of price. And as you can see, China dropped quite a bit. And this is mainly in the third quarter because of the Zero-COVID has cut down a lot of economic activities in China. Okay. In terms of the HVA, the numbers of HVA stay relatively about the same. But nevertheless, increased by about 15% in terms of the amount comparing to last year. New products, this is the major progress. New product introduction contributed about 17% of the total sales in the first 9 months. That increased by about 31% compared to the first 9 months of last year. Service Solutions also increased by about 38%, which accounts for about 6% of the total sales of the first 9 months. So now I'd like to pass it along to Khun Tanawong for the Chemicals business. Thank you.

Good morning. Good morning, krap. For SCG Chemicals before I move to the performance in the third quarter. Let me begin with big picture. I think as Khun Roongrote mentioned about the situation, actually, after extended peak from 2014 until last year, we are seeing now that we are a cyclical trough with additional capacity. But this time, there will be a kind of global factor that impact on demand, especially the slowdown demand in China from COVID lockdown, and also last year, you claimed cleared a CAP, a kind of volatile in terms of crude oil price and naphtha price as well. So this is something that what we see in the big picture. So as also, you may have heard that many players, they have to -- I mean, because of the margin significantly dropped. So many players have to cut line between 15% to 30%. So this is the big picture of the situation. So what we did and what we're doing now, actually, that of course when we learned bit of Chemical, we have to do the full-scale optimization from feedstock optimization, from the product portfolio optimization. So this is something that what we did in the third quarter and going forward. And the second item is, we have to look at CapEx really prioritize, but still we -- we're still focusing on the committed CapEx and clean polymer and HVA specialty product that is still our focus. And of course, lastly, we have to proactively manage our financial liquidity to make sure that we have enough liquidity to support our operations. So this is a big picture that I tried to give you that you can see what happened in the third quarter. If we look in detail, in the third quarter, like I mentioned, crude oil price that weakened globally are rising concern of the recession. Now there will be a, I would say that on one hand, they, I mean, they are quite concerned on the demand side because of the recession fear. But on the other hand, crude suppliers in terms of inventory close itself, the OPEC and OPEC+ they have a low inventory of back capacity. So this will be the balance between softer demand and tight supply. So this is the situation, but compare third quarter, the crude came down. And naphtha also even lower because of the cut line like I mentioned earlier. But because of weak demand of the polymer from COVID lockdown in China and global recession. So the gap of PE-Naphtha and PP-Naphtha also squeezed. So that's why if we compare the third quarter and second quarter it's came down significantly. But if we look to quarter to date, what we have seen I would say that in the -- the margin should be stabilizing in the fourth quarter and going forward, mainly from the industry because they also control the supply. In terms of the volume in the third quarter, our polyolefin volume slightly declined compared with the second quarter. And this is actually, one thing that we can give you an idea that when we see the situation in the third quarter, we -- starting from the beginning of the quarter, we slowed down the capacity. But at the same time, what we have seen, we saw the condition of some equipment of the tracker that is kind of abnormal condition. So that's why we made decision to do the -- actually, we plan to allow for LSP for next year. But we -- I mean, for more than 6 years. So after a slowdown when we saw some conditions that are not that good. So we brought down from the mid of September. So that around -- will be around 45 days. And this is where we have to monitor. I will give you an idea that, like I said, in terms of the lending capacity now, what we try to do of cost when we compare to the industry, I think we are more or less the same range that when we cut line capacity. So in our case, like I mentioned, we have -- we try to maximize the pricing at limited supply. So this is our strategy to make sure that we can optimize. For the Vinyl business, Vinyl PVC price also decline on weak demand, and there's some supply. You may have heard that when China locked out in the third quarter, there is a kind of additional supply from China to North Asia and some project in South Asia. So that's why the PVC CAP squeeze in the third quarter. And look at, again, at -- in the fourth quarter, we do believe that margin is still more or less -- not a big difference compared to the third quarter? And it is mainly due to the EDC price or also came down from the product price, I mean, PVC price slowdown. In terms of volume, the volume actually slightly come up 1%, but actually, this quarter, we have already planned for VCM #1 turnaround. But again, this is, I think we -- in the third quarter, the main reason that make the CAP that about what I forgot to tell you that typically in the third quarter in Asia and in India, We have life we call monsoon season. The construction activity a bit slowed down. So that's why the demand in the third quarter slowed down. But what we try to do, we also try to export our PVC some portion to India and Middle East and Africa. So this is -- that's why we can maintain PVC volume in the third quarter compared to the second quarter. In terms of financial, the revenue dropped Q-on-Q and year-on-year, of course, mainly from the price decline as soften demand happened in the third quarter. And EBITDA from operation decline, and if we look at EBITDA at -- in the third quarter is we have EBITDA negative THB 950 million. And -- but if we look at the core EBITDA, I mean we have -- actually, we have inventory loss, and we have some excise into core EBITDA only minus THB 354. So this is in the third quarter. And for 9 months, EBITDA around THB 15,000 million, reduced around 55% year-on-year. For the profit, profit itself similar to the EBITDA, the profit is minus THB 339 million. And we have eventually lost around THB 1,000 million. So if you look at the core profit, if we exclude inventory loss, the core profit is approximately THB 600 million. And look at the 9-month core, the profit is allowed THB 7,000 million. So in the -- for the outlook, I would say that economic factors are still quite challenging. I think last year, U.K. in the -- what we have seen the situation is still prolong and I think China, we -- after they have a CAP, I mean the community party meeting. What we hope that we see the possibility that they may lift they are locked down gradually. So the demand may pick up. So this is something that what we have seen in terms of global and ASEAN factor. And in terms of demand, again, I would say that the most one uncertainty. And the only possibility that I mentioned if China they decide to lift the lockdown, the demand may pick up. The Vinyl, I think, like I said, seasonal, actually, now the fourth quarter, the construction activity will be soon after the monsoon season. But one thing we see the global economy demand is still not that good. So this will be another negative factor from the one point of view. In terms of supply, we still see new capacity in the fourth quarter. And -- but again, like I said, what we have seen in the third quarter that after the margin sweep, I would say that most of the players, they still keep the cut line strategy. So this one will help maintain to reduce the supply. For Vinyl, there will be new capacity in China and we again -- but what we have seen, the cost of EDC is still lower. So this one will at least to help maintain the PVC and EDC gap. And for oil price, I think oil price still remained volatile and in line with -- I mean naphtha also volatile together with crude price, so this is the outlook for the fourth quarter. For the strategic update, I think you may have heard before that we did our filing and we got approval early October. But this one, because of the global situation, what we have seen that in terms of the IPO, we think that we will not -- the IPO will not occur in this year. We will monitor the situation again next year, and we will come back and update you. And the global factor, like I mentioned, like recession that many people are talking about inflation and of course, the China economic slowdown, and then also the equity capital market. Now what we have seen that a lot of things change in terms of the capital market. The financial update, you -- we issued debentures THB 30,000 million, -- and the lens value between 3 to 12 years and coupon rate 3.26%. This -- last month, as Khun Roongrote mentioned, we enter into the climate with the leading acetylene black supplier and producer, Denka. Actually, I said the good quality of acetylene black what they produce, we can use to produce the cathode and anode for the EV battery. So this is material that sometimes they call the conducted carbon filler that the fillers are very good in terms of their conductivity, so they can produce the EV battery for EV car. At the same time, they also can use with the high-voltage cable. And our capacity, we plan to build. And actually, we have a 40% share. And the capacity, we're talking about 11,000 tonnes. At this time, we may not give you the figure in terms of investment because we are now still in the design and the bidding process. But I would say that this is also one of the large investments. And when we're talking about 11,000 tonnes, I think you what I can give you a picture that [indiscernible] of the acetylene black. If we use 1 kilo of acetylene black, we can supply for 1 EV car. So it means that you're talking about around 11 million or 12 million car of EV car, that we can supply from this plan. And we plan to do the engineering and construction and complete early 2025. And this is, I mean, our partner, just to give you an idea, that Denka also one of the largest one. They are the largest, actually, they are the larger supplier of the acetylene black in the EV value chain. For ISP, I think, of course, you have heard that we have incident at HDPE plan, but this is like a limited impact. So we can't repair and construct the plant, and we'll complete, it takes only maybe 3, 4 months. So it means that early next month that we can resume the operation of the HDPE. But the main concept for LSP, I would say that we will keep our focus on the safety and also on the preventive measures. We apply a lot of measures to make sure that -- because actually, when the incident happened, if it's under the contractor, they do the commissioning and start-up. So this time, we will do better with them closely and make sure that we can start up our complex sample. And in the big picture, if you see from the schedule, the upstream plant we will start up allow the end of the second quarter or early of the third quarter that we can have a commercial operation. So you may ask that how about the situation, I would say that we still have next quarter and also first half next year. Like I said, there will be a possibility that the demand will pick up from the -- if China, they lift the lockdown. So this is something that we will focus on as we start-up. And again, I still confirm that like I mentioned earlier, what we have to do, we try to optimize our operation to make sure that we have not only the product, but also feedstock and one thing long term we have a good flexibility in terms of we can use Propane up to 70%. So at that time, we have to do optimization along the value chain. So this is the update for long term. And the propane of the construction is 97% now at the moment. So that's all I have. Thank you, krap. May I pass to Nithi krap.

Krap, good morning. Today, we would like to start with the key execution in third quarter. First, we increase our revenue by raising price to compensate the cost push. Cement price continue to be raised in line with the market. Second, we drove a strong increase in ceramic sales volume as well as selling pricing. Third, we dropped sale of NPD, HVA and Service Solutions. On cost management, first, we reduced imported coal portion by 48%. By maximizing alternative fuel like biomass, RDF, industrial waste and others like solar power, we increased solar power 28 megawatts, bringing total to 153 megawatts. And lastly, we actively adopt lean and automation ID4 to our supply chain management. For the execution growth, you would have seen the announcement last night, our logistics business, we will have a special briefing on the deal this afternoon. However, since we rarely talk about SCG Logistics. So let me tell you a little bit more about our logistics business. SCG Logistics is one of the leading integrated logistics and supply chain solution provider in ASEAN with over THB 20 billion revenue and THB 1.5 billion EBITDA. The company provides one-stop logistics service with end-to-end offering from warehousing, freight forwarding, custom clearance, multi-model transportation, including road water, air and rail. We have asset-light model and have the largest network of truck and ecosystem in Thailand with more than 10,000 trucks. We have the last base load volume from captive customers within SCG, which provide revenue stability. And the collaboration between SCG Group, we allow SCG Logistics to associate expansion in ASEAN because we have many investment in ASEAN. One of the key strategy is to leverage our base load and grow non-SCG products and services. This is the new logo. You can see the head of the arrow go together in the orange color. So let me touch a little bit on what we mean by partnership. SCG Logistics will merge with JWD, by way of [indiscernible]. After the completion of the merger, the merge entity will change its name to SCG JWD Logistics Public Company Limited. We believe this transaction will be value accretive. SCG and JWD have complement customer portfolio, expertise and services. Economy of scale and scope will enable more efficiency and coverage, significant potential synergy existed. We expect the transaction to complete within the fourth quarter of next year. As mentioned earlier, we will have a special briefing on SCG JWD Logistics this afternoon, where we will be happy to entertain question at that time. Let me go to the normal presentation. For Thai market, for grey cement, demand increased 6% year-on-year. Residential 5%, commercial 8% and infrastructure 6%. For the ready-mix concrete increased 9%, housing product, 8% and ceramic tiles 8%, you can see every segment grew. But however, this is grew from the low base last year that we have close construction site in July and August. For the ASEAN market, cement demand in Vietnam and Myanmar improved while demand in Cambodia and Indonesia dropped due to the higher price affecting construction activities. For ceramic tiles, overall sales volume and price increased year-on-year, thanks to better demand in both domestic and regional markets. For Thai sale segmentation, ceramic -- for Thai sale segmentation, domestic sales in this quarter rose by 15% year-on-year from increased sales in most business segments as a result of upward pricing adjustment. Total ASEAN sales rose 20% year-on-year. Thanks to increased sales from ASEAN operation and export sales to both ASEAN and non-ASEAN market. This was due to both proactive effort and improve business sentiment from improving COVID situation in regional market. Revenue from sales year-on-year increased higher, higher in both domestic and regional market. EBITDA and profit. EBITDA and profit decreased because of the cost push environment that you may know that both coal, electricity and also gas increased a lot in the third quarter. Outlook. We see the improving domestic economy and sentiment, while the cost pressure still exists. Improving domestic tourism could improve business sentiment. Private sentiment in both residential and commercial segment expected to gradually improve. Rising inflation could lower consumer purchasing power. Cost-push situation, mainly from energy costs expected to persist in the fourth quarter. We plan to continue the commercial strategy to compensate the cost push. Key factor affecting demand will be inflation and rising interest rate. For company update, we opened additional 9 ceramics retail outlet to a total of 92 stores nationwide. And SCG Ultra high strength fiber-reinforced concrete received the award from Thailand Concrete Association and also received the Excellent in Concrete Awards from American concrete Institute. You can see in front of our building here, the bridge, the concrete, with very, very thin concrete like steel in front of our building. That's all from CBM, krap. So [indiscernible] please.

Okay. Good morning. Let me start with the recap on SCG Packaging. They already have the analyst conference on Tuesday. So we'll do a video recap for them. Okay. Despite a very challenging situation, SCGP continue to pursue that growth strategy, but with a very prudent approach, okay? China still remained weak in terms of the demand. So what SCGP has done is that they did the portfolio optimization by expanding into the new markets like South Asia. On the ESG front, they are very well on track to achieve 100% of recyclable, reusable and compostable packaging in 2025. Okay. In terms of the financials, the revenue grew quite significantly, 26% year-on-year. That's mainly because of the inclusion of the revenues from the M&P transaction that they have done, like their TUP in Spain or recycling material packaging in the Netherlands and in U.S.A. Nevertheless, because of the higher raw material price and energy costs. The core EBITDA dropped slightly, and the core profit dropped as well to THB 5.1 billion for the first 9 months. On the financial results. Let me start with the net debt position. Net debt for the first 9 months increased to THB 282 billion. And because of the lower EBITDA, as Pichit already mentioned, net debt-to-EBITDA rose from 2.6x at the end of last year to 3.9x at the end of third quarter. But if we were to exclude the projects under construction, which are mainly LSP, net debt-to-EBITDA remained quite strong at 1.7x. In terms of the capital expenditure and investments for the first 9 months, we spent about THB 39 billion. Almost half of them was from Chemical business, which is mainly the LSP project in Vietnam, Okay. We continue to rule the prioritization of the our spending, for this year, we expect total capital expenditure and investment around THB 55 billion. If you could recall last quarter, I told you that this year would be about THB 70 billion. We continue to review the -- and prioritize the project and we cut out about THB 15 billion in terms of the spending this year, from last quarter that I told you. Lastly, on the financial highlights. Despite a very challenging situation. Our balance sheet remained quite strong. Net debt to equity is only 0.6x with the interest coverage ratio of the 4.9x. The key emphasis for us is to -- how to maintain our liquidity position, okay? I would say that our liquidity remains sufficient. At the end of third quarter, we have cash of about THB 69 billion. And as Pichit mentioned, SCGG, that successfully issued debenture of THB 30 billion at -- I would say, a very competitive rate, 3.26% for the average tenure of 5.5 years. SCGP as well, they successfully issued our first digital bond of THB 5 billion in August. Our contribution from investment, our investment portfolio, Basically, in automotive and the agricultural sector remained very strong this year, okay? That's pretty much on my part. May I pass on to people? Okay.

Good morning, krap. On the sustainably update, probably I can begin with the emphasis on -- this is a group-wide strategies. And we look at ESG as the part of the business strategy that we try to create sustainable at the same time, create competitive tests. So even though we are talking about the greenhouse gas reduction, but we do not do the greenhouse gas reduction just for the sake of those greenhouse gas reduction to get some award. Our emphasis is on transform our operation to reduce the greenhouse gas. That's what we try to do. And of course, we have to make sure that we are in line with the well below 2 degrees. And according to the site-based target. This year, our target is 32.2 million tonnes emission. And for 9 months, we emit 23.7 million tonnes. So likely that we can meet our target this year. And the main factor that contribute to this lower greenhouse gas emission is to increase the renewable fuels. So our renewable fuels the alternative fuels usage has increased from last year, 18% of our total consumption for cement. This year, we can achieve 34% for the past 9 months. If you just look at the spot toward the end of the third quarter this year, the percentage of alternative fuel usage in the cement plants go up to 40%. That helps a lot, not only in terms of the greenhouse gas reduction, but also the cost optimization. Next one is on the green products. Most of the greenhouse gas reduction come from spending money to improve the process. But there's one very important strategy is to create green products, because the green product allow us not only to earn the money, to earn the margin but also to reduce the greenhouse gas emission. So for 9 months, our revenue from sale of the product, which is less greenhouse gas emission or we call it the SCG Green Choice amount for to THB 223 billion or 50% of our portfolio. So that's something we try to do. Of course, the Green Choice, we have to update this standard to transform our product portfolio into the green products. So I just want to show you some of the very important green product, which is the low-carbon cement. This is the hybrid segment. This year, we aim to increase the proportion of the green cement to 50%. So basically, we reduced the OPC and ship into the hybrid cement. This hybrid cement is generation 1 and generation 2, okay? So in the future, we are launching -- at the moment, expand the Gen 2 hybrid cement. And in the future, we will launch the Gen 3. So you could see that we will update our product portfolio to make it greener and greener. And as a result of this 50% hybrid cement introduction, we can reduce the CO2 reduction by 180,000 tonnes of the CO2 this year so far. And in terms of the social, especially on reducing the inequalities, which is very important, and this is a social pressure that we are facing at the moment. This year, we can achieve more than 8,000 job creation and skill upgrade over the past 9 months. The CPAC has launched a program to upskill our eco-partner to educate and to train the eco-partner to understand the green construction so we can achieve the 2,359 persons and also building the commodity training program for another 2,250 and so on and so forth. So you can see -- or another thing is the Q-Chang. If you haven't tried Q-Chang yet, I just recommend you to try if you want to find a good chang to fix something in your house or in corridor. And as part of the business model building, we need to train the individual chang to be a qualifier. And the collaboration, of course, to achieve the ESG, we cannot do it alone. And we join hand with -- just recently, we joined hand with the Thailand-Nordic Countries Innovation Unit and this to provide the opportunity for Thai startup to scale up in the Nordic market and to access to venture capitals. So these are another collaboration we are pushing. And also, in terms of the carbon footprint assessment platform, we work with TGO and BIM object and CPAC. We join hand to create this platform. So when you decide the construction, you can use this object and you can know the carbon footprint, that is the stepping stone toward the carbon footprint that will help us in the scope-tree later on. And for the -- now as [indiscernible] already discussed that we are in the mid of the energy crisis. Energy price could stay on at a high level. And the world needs a lot of transition -- quick transition to the green energies. So we are participating in this -- the green expansion, green energy expansion. Now if you look at our track record is that we are building the green megawatt, and I intend to, from time to time, come back to update you on our green megawatt accumulation. This will allow us to be the key player in this -- the new energy transition. But again, as SCG's time, we not only participate in the green transition based on the basic tight or we call it the commodity tight but we're also thinking about HVA. And one of the initiatives we tried to create the value added to our customers is we are developing the smart grid. And we are in the sandbox, also the government sandbox. This market will allow the customer and buyer who connect to our smart grid to buy and sell. So basically, renewable energy can be buy and sell within this market network. And so that will prepare us for -- to expand this business when the third-party access program has been approved. So that another development we try to do, krap. So that for the sustainability part. Krap, May I pass back to Khun Roongtote.

Thank you, krap. In summary, our profit in the third quarter was the THB 2.4 billion, significantly dropped Q-on-Q and also year-on-year. That's mainly in the Chemicals and Cement and Building Materials. In terms of our handling of this crisis, I think we can divide it into 2 prongs. One is making sure that you run the operation as tightly as possible, thinking, synchronizing the operations with the market demand. At the same time, we also hope to be able to raise price either in the form of new product introduction, pass along the cost increase as much as possible in order to maintain or recover from the shrinking margins of our products. In terms of capital expenditure, I think the ongoing one will be completed very soon, which is LSP. Other than that, we don't have much with the exceptions of the investment in the energy cost savings and renewable energy. In terms of cash flow and financial ratio, I think we continue to remain basically healthy. And on the other prongs, which is the strategic move in order to secure the long-term growth, I think I mentioned about the renewable energies, green recycling business. For example, of SCG Packaging investment in Netherlands and the U.S. and also the -- in line with the trend in terms of electrification, the joint venture with Denka. And as you are aware, the merger of the logistics between our SCG Logistics and JWD in order to create ASEAN the largest logistic platform. So in terms of LSP, we are on track for next year around middle of the year start up. And in terms of the SCGG IPO obligation, this year it's not going to happen. So we'll continue to monitor the market situation. So that's basically all the summary for the third quarter. Thank you.