CTTOF - CTT-Correios De Portugal S.A. (CTTPY) Q1 2023 Earnings Call Transcript

2023-05-05 17:03:02 ET

CTT-Correios De Portugal S.A. (CTTPY)

Q1 2023 Results Conference Call

May 05, 2023 4:00 AM ET

Company Participants

Joao Bento - CEO

Guy Pacheco - CFO

Joao Carlos Sousa - Chairman

Conference Call Participants

Joao Safara - Banco Santander

Filipe Leite - CaixaBank

Antonio Seladas - AS Independent Research

Joaquin Garcia - JB Capital

Presentation

Operator

Hello, and welcome to the CTT First Quarter 2023 Results. My name is Caroline. I'll be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions]

I would now hand over the call to your host, Mr. Joao Bento, the CEO; and Guy Pacheco, the CFO, to begin today's conference. Thank you.

Joao Bento

Thank you, Caroline. Good morning, everyone. Welcome to our first quarter results webcast. Today, we are also including an update on our real estate portfolio optimization, as you've seen in the presentation that was distributed yesterday. So if you follow me, starting on Slide #4. The overall impression we like to start is that we have a very robust operational performance in Portugal and the strong cash flow -- free cash flow generation in the quarter.

And this was a result of several factors, of which I would highlight on Parcels. Strong growth of volumes in Portugal, reaching almost 15% year-on-year. And although Spain had a challenging quarter, we see visible improvement in activities throughout the quarter, and as you're going to see later. Then on Mail, it was a very interesting quarter with recovery in revenues and with revenue growth and also the cost reduction, inducing an improvement -- significant improvement in profitability. Likewise for Financial Services, where we had an exceptional high demand of public debt certificates, driving record high revenues for the quarter. We continue to transform our retail network, as we've stated many times recently, towards the service network, which is important also given the high rate of placements that we are observing. Results from insurance distribution with Generali, were also present in the quarter, although not yet very visible.

But going forward, also looking very good. Finally, the bank, with the growth on all aspects, client, volumes and revenue with a solid performance and the improvement in profitability is clearly driven by this exact growth. And with these factors, we're moving to the right-hand side of the slide. We see the main financials with revenues up 3% year-on-year. If you would remove or normalize to the special effects of the first quarter last year, revenues would have grown by 15.3% quite substantially and recurring EBIT of EUR25.7 million, also a very significant growth year-on-year. Also an important facet of this quarter results, a strong operation -- operating cash flow generation of EUR44 million.

Free cash flow reaching almost EUR40 million, and therefore, a consolidated net cash position with a significant improvement versus the -- well, the year-end results. If we account or while accounting Banco CTT on equity method, the net debt stays now at EUR150 million, down EUR42.5 million. So, very good drivers in the quarter and very good financials as a result. Moving to Slide #5, and going into a bit more detail. So, we see this robust performance across all segments, while we need to improve E&P in Spain. We've seen the numbers, both on revenues and recurring EBIT.

So, I would invite you to follow the bridge on the right-hand side, top right-hand side, where we see that apart from a slightly negative contribution in terms of growth of E&P, which is explained only by the Spanish performance. We have Mail and Others, Financial Services and Results and the Bank, all with positive contributions in this bridge that took us from EUR6.7 million to EUR25.7 million of recurring EBIT in the quarter. One of the most relevant news being the performance in Mail. Moving to Slide #6. We see a continued recovery in volumes, revenues and profitability. So, we have this -- on this chart on the left-hand side, exhibiting a monotonic growth in volumes.

And again, an interesting step forward in the quarter. With this, this translates to revenue growth of 9.3%. And likewise, for the margins with improvements in EBITDA and EBIT margins as shown in the right-hand side of the quarter. So a very, very promising quarter for Mail. Moving to Slide #7. We see volume performance, inflation and capacity expansion as the combination of the factors that affected the performance in Spain.

So volume is still below target. Although as you can see in that detail in the left-hand side chart, we are seeing an interesting trend throughout the quarter, with February performing better than January and March with a positive growth of already 10%, which gives us confidence that things in Spain are improving in right direction. With this volume performance, revenues stood flattish with a minor growth. And it's basically inflation and the capacity expansion that provides now a higher operational leverage potential in the sense that we have more capacity than the volumes that we had throughout the quarter. That affects margins, and therefore, we saw a reduction in EBITDA and EBIT in the quarter. Moving to Slide #8. We've seen improving traffic and revenue dynamics leading to this growth in Mail that I referred to.

We are observing, what I would call, a low decline, 4.4%, if adjusted for the elections impact of last year or 5.2%, so low. And combined with an average return -- revenue per item, we see, as a factor or a consequence of the new pricing power that the new concession contract provides, we see a very interesting 10.3% revenue per item growth, which provides for this improvement in Mail revenues, which would be 1.4 or it was, in fact, 1.4%, if not considering the special effect of last year, but a very significant growth without the elections impact. That way doesn't seem to repeat this year. So, that would represent a 5.4% growth in revenues year-on-year. This is more visible or a little bit more detail. If we go to Slide #9, where we see a balanced revenue growth across regulated and competitive mail segments.

Indeed, we see for the first time, for a long time, regulated mail growing revenues from EUR56 million to EUR57 million. Competitive mail also with a small 2.3% year-on-year growth. And more than that, we see maybe for the first time, for a long time, a contribution of international inbound roughly neutral in the sense that we came from EUR5 million of revenues to EUR5 million of revenues in the quarter. And it was, in fact, only the fact that we have a decline on business solutions revenues that accounted for the difference. But even so, if you look at the call, we have at the left-hand side, laptop sales that you call box moving things with smaller margins. Last year, accounted for more than EUR21 million.

So, we should remove that effect even on business solutions like-for-like growth. Growth was significant, more specifically 6.5% year-on-year. So moving to Slide #10. We are highlighting a focus on some activities, retail network in a services platform -- on the platform of services to the citizens. And this is important in the sense that we are focusing our portfolio of services. We are, of course, the service provider for the bank in terms of physical network.

But we -- given the new partnership with Generali, the transformation of the retail network to service platform becomes even more relevant. And we are now providing a portfolio of Financial Services that goes from set of credit, of course, in the bank, savings in the bank, savings in CTT, non-life insurance, money transfers, payment and all that and in fact, it provides a portfolio of Financial Services that is doing well. But for that to be possible, we need to keep improving our, what we call, the store experience or user experience at the store in the sense that we need to improve efficiency in the usage of the space and the time in the store. And we are doing that by building customer journeys as our omnichannel that includes self-service, so that people can start their journeys online, on their mobile or in a self-service mode while in the store or outside of the store. And so that we are also redesigning a number of process. So, a more efficient retail network and the better user experience enables and provides for a higher business activity.

And that is exactly what we have observed, given the public debt performance that in detail, we could see -- that if you follow me on Slide #11.In fact, it drove revenue performance and offers a very solid outlook. This is, in fact, one of the most and I'd say the most significant factors of this quarter. We almost doubled a very strong last quarter of last year where we had placed EUR4.3 billion, and we moved to EUR7.5 million and accordingly sell for revenues. On the other hand, we have also declined 17.1% other retail stuff in the sense that we keep pursuing repositioning of the network, as I said, towards services. And as such, we need to discontinue, and we are discontinuing certain retail products that includes, for example, scratch cards.

So a very good -- the performance of the retail network, of course, with a significant contribution from Financial Services. And now I will hand over to Guy for him to guide us through the bank performance and the financials.

Guy Pacheco

Thank you, Joao. Good morning. So on Slide 12, we can see Banco CTT drivers. Banco continues its part of growth with auto loans growing 16.7%, the mortgage 9.2%, and we continue this good performance of opening new accounts that grew 6.3%. Our customer resources with a slight stabilization trend, now with a growth year-on-year of 5.7%, but I should say, in line with the Portuguese banking sector. On the next slide, we can see the top line and return on tangible equity of the bank. On the middle, we have the revenues that grew 21.4%, mainly driven by the net interest income, both by factor of volumes and higher yields.

The net interest margin now stands at 2.9% on the bank. The revenue performance in higher efficiency drove our return on tangible equity efforts that now stands on an annualized basis of 6.7%.On Slide 15, we start our financial review with the key financial indicators, where we can see -- what we see a set of strong financials with a robust performance in revenues that grew 3%. With the exception of the Mail business unit, we saw all units contributing positively to growth. Our recurring EBIT as reported in the quarter to EUR25.7 million. Our net income reached EUR16.1 million, and our free cash flow generation stood at EUR39.7 million. On Slide 16, we have the group revenue evolutions that grew 3% that we mentioned.

In Parcels, a positive contribution of EUR3.3 million, 5.4%, with this split or contrasting performance with Portuguese operations continue to have a sustained improvement both on volumes and revenues. Volumes grew 14.7%, and revenues 9.3%. In Spain, quite the opposite. We have declining volumes of 8.3%. Although, as Joao mentioned, with continuous improvement throughout the quarter that closed with March already accruing 10% of growth. Revenue stood with a marginal growth of 0.6%.

On Mail, a decline of EUR19.1 million, but completely explained by these 2 effects -- 2 events last year, the laptop sales and general elections rerun that happened on first quarter 2022. If we exclude that, we have a strong underlying growth of others and mail revenues that contributed positively for our profitability as we will see later on. In terms of Financial Services & Retail, EUR16.8 million growth, driven by this exceptional high demand for public certificates, debt placements reached EUR7.5 billion in the quarter, that more than offset the revenue decline in retail and drove the results of the quarter. Banco CTT continued to grow on the back of net interest income, expanding by higher volumes and higher yields. On next slide, we see our OpEx, that declined 5.3%, with E&P growing EUR3.7 million. Portugal growing cost below volumes with unit costs declining despite continuous inflation pressures. In Spain, a growth of 3%, as Joao mentioned, driven by higher overheads because we continue to expand capacity and we have this portfolio of projects to expand capacity that come online this year.

And we continue to have higher unit costs that are driven for inflation. Of course, the compression of volumes doesn't help us on that front. Mail and Other declining EUR24.5 million due to the reduction of direct costs coming from those 2 events, laptop project and general elections. But we continue to achieve additional cost savings that help us to offset wage inflation. But this year is still significant, as you know, and as such, a good performance here. Financial Services growing EUR4 million with increased activity.

Banco CTT increasing EUR5.1 million, mostly driven by cost of risk, that increased EUR2.2 million. Cost of risk now stands at 1.4%, in line what we expected for this year and with stabilization trends versus the last quarter last year. Slide 18, we can see our strong performance in EBIT that grew EUR19 million in the quarter, Express & Parcels declining by the split performance, where Portuguese operations growth started to offset the higher overheads that we had last year and consistently positively for profitability. And Spain with this lag in resuming growth, although we have positive signs, but in the quarter is still contributing negatively. Mail and other improving EUR6 million due to the robust other mail sales and cost efficiency. Financial services completely explained by the exceptionally high demand for public certificate.

The bank growing EUR0.9 million with net interest income driving revenues upwards. On Slide 19, we have the cash flow, a strong performance here as well, driven by operational performance. Our operational cash flow standing -- stood at EUR44.2 million. Our CapEx of EUR5.6 million in the quarter, declining 6.2% year-on-year. And all of this led to a free cash flow of EUR39.7 million. We have now a net cash position at a consolidated level of EUR17.3 million, if we account for IFRS 15 lease liabilities. Now changing -- starting on the final remarks, we included, as we mentioned, some slides that we extracted from the deck that we distributed with the announcement of our real estate transaction.

And as you know, we basically split our retail assets in 2 buckets, if you want, one with the development assets, a set of 10 assets in good locations in Portugal, that we see our operations exiting those buildings and buildings that have development opportunities. And as such, we are addressing a strategy for those assets -- an asset-by-asset strategy that we think will take some 2 years to 5 years to execute. And for the remaining of the assets, assets that we aim to continue using for our operational activities. We decided to create a yield vehicle that we call this the set of assets in our portfolio that will be carved out into a new entity that we could call CTT IMO. This entity will be converted to a SICAFI, and then it will be selling a stake of 30.1% of this vehicle to a set of investors, external investors and Sierra, that will be the manager, an asset and property manager of this regulated vehicle.

We continue to see the opportunity, or we maintain flexibility to monetize these assets, if you want, in the future, always keeping a controlling stake of 50.1%.On Slide 22, we can see the main figures of this transaction. So, we are transferring the assets with a valuation of EUR136.4 million, where we can expect an additional earn-out of EUR2.6 million, depending on the monetization of some of the assets. And we have agreed the sale of the stake of 30.1% for a fixed price of EUR42 million. The base case investment cash yield for the vehicle would be 6.3%. And this transaction has some one-off transaction costs, mainly tax of EUR12 million and EUR2 million to set up the vehicle.

And we continue to have this additional buffer of liquidity, if we decide to sell additional stakes. Those additional stakes won't have additional transaction costs. We continue to see inside of the vehicle, upside for additional cash flow generation by the optimization of the properties, and both used and unused with a more professional management of the portfolio. In terms of lease agreement highlights, we will be renting 75% of the gross lease area. We have basically 2 periods of lease agreements. One minority of assets with 20 years lease agreements and the rest with 12-years agreements, all triple net.

And we expect on year one, the amount of rents paid to the vehicle by CTT of EUR9.5 million. On Slide 23, we highlight what are, in our view, the benefits of this transaction. First, crystallizing the value of our real estate for the yield portfolio. We continue to see opportunities of adding value to this portfolio by more efficient and professional management of the assets, with clear opportunities to have operations to enhance value. And we keep flexibility for the future to tap in additional liquidity, if needed. And as such, I will pass you to, Joao, for his final remarks.

Joao Bento

Thank you, Guy. Well, the overall message we would like to convey is that it's quite explicit. Obviously, we are upgrading our recurring EBIT guidance. And this conviction stems from the fact that we have seen improving E&P performance in Portugal. And we also see a trend of an early positive sign or positive signs that would enable profitability improvement in Spain, which is our main focus to resolve now going forward. Also on Mail, we saw improving revenue performance. And we see it staying as it is, driving profitability, while we keep focused on costs and on the sustainability of the margins that we are now starting to recover.

We keep a strong expertise on this idea of transforming the retail network, idea and action towards the service platform with a special focus on savings and insurance distribution. We see the bank delivering on volume, revenue and profitability growth as it did during the quarter. And therefore, overall, we had a strong quarter with consolidated revenue and recurring EBIT growth. We generated strong free cash flow, improving our financial flexibility. We delivered on this real estate transaction that crystallizes value and again, optimizes our capital usage and enhances our balance sheet flexibility. And with all this summing up and the trends that we see and the dynamics that we are observing, we decided to upgrade our recurring EBIT guidance to at least EUR80 million for the year, which again stays as an open-ended guidance in the right-hand side.

And we believe that was the right thing to do. And with this, we remain available for your questions. Thank you, all.

Question-and-Answer Session

Operator

[Operator Instructions] We will take the first question from Joao Safara from Banco Santander.

Joao Safara

Yes. This is Joao Safara from Banco Santander. I have 3 questions. The first on Express & Parcels, particularly in Spain. Just wanted to understand the -- how is the mix evolving here in terms of B2C and B2B?

And also, I mean, the weak volumes is there, what is the explanation for the weak volumes in the first quarter, if there's any client that moved away from that -- I mean that moved away [Technical Difficulty] from the contract you had with them? Or any explanation would be very helpful. Then the second question is on the real estate strategy. And just wanted to understand what you intend to do with the EUR40 million proceeds from this transaction? And thinking about also the longer term, how is this vehicle going to be used in the future? Will this be a platform to invest in?

I don't know, new logistics -- new network that you need. I mean, will this be, let's say, just a fund where you want that will remain with the same assets? Or will this be reduced in the future to also to invest in other assets or mainly in logistics? And then just a last question. If you could give us some idea of -- I mean we saw a slowdown in the deposits versus the fourth quarter of the year. Just wanted to understand if there has been, let's say, withdrawals from the deposits into public debt instruments?

Is that what has been happening? Or is that just the fact that you've been -- I think you're struggling getting more clients on board? That's it.

Guy Pacheco

So Express & Parcels. So thank you, Joao, for your questions. Let's see -- we continue to see after the first -- the difficult 2 months as January and February, a strong demand for B2C, and we saw volumes increasing since then. And we continue to see the market in more recent days strong in that area. What explains our losses of volumes on the first 2 months of the year is not any churn on many big clients, but bad dynamics on that portfolio of clients.

So we -- at least on the volumes treated by CTT Express in Spain, our biggest client is Chinese or the other European players. We saw reduction of volumes. We continue to -- although being B2C to be very active in trying to diversify away from these big customers to the local Spanish companies with small, medium or big corporates, that we are doing with some degree of success and gathering pace because we are building a sales funnel and starting to have decent hit ratios on those funnels. And this is a process that we need to continue to develop in order to also to manage the price per unit because as you know, this combines higher price per unit and also better margins. But nevertheless, also on the big accounts, we are seeing a very positive trend in terms of volumes. So, I think that we can expect that the scale will be there, hit by accounts or small accounts for the next quarters, but we'll continue to -- this effort of creating less dependency of big accounts at least for the physical market. In terms of deposits -- and then I leave the real estate question for Joao.

Of course, we have the banking sector in Portugal lost, in our view, some deposits to the government competition in terms of public certificates. As we see the overall market numbers, Banco CTT was less affected by the flow of money. We increased our share of the national deposits, although we saw some decline on deposits, but not by losing customers or lower growth because we continue to have a significant number of accounts in our stores every week. That continues and actually showing kinds of improvements. We saw the banking sector losing 4% of deposits.

We lost 1.6% in cash flow. In our view, we gained share, but the sector lost deposits [Technical Difficulty]. We remain active. And of course, we continue to vigilantly address any issues on this issue. On real estate, Joao?

Joao Bento

Yes. Okay, Joao. Thank you for your question. So what we do with the proceeds -- the portfolio of usage is quite obvious for us. We have restructuring costs that we'd like to mobilize -- to pay, sorry.

Through this, we have M&A, both growth and filling in our value chain. And of course, shareholders remuneration. We are taking it quite clearly. So the main comment here is that we see what we are doing here as a capital optimization initiative. And we are monetizing very, very until that [Technical Difficulty].

And the proceeds will be for the [indiscernible] restructuring, that will then deliver further efficiency, M&A, and of course, shareholder remuneration. You also asked what we're going to do with this vehicle. The vehicle is one of the things that he has mentioned and disclosed in the presentation that with the professional partner, we will have help in actually optimizing our real estate presence for operational purposes and for business purposes. So, we get also that. It will obviously promote and facilitate and improve our ability to grow diligently this operator. But formally, the vehicle is an operator in the real estate sector.

And this is the first purpose. But it will be available for other things. As Guy has stated clearly, we are now operating part of the value of the asset. We do not intend to lose the majority. So, we will always consolidate this vehicle.

But in this initial investment that we have disclosed now, and the remainder to keep the majority. There is further room for additional receipts where we can mobilize.

Operator

We will take the next question from the line of Filipe Leite from CaixaBank.

Filipe Leite

I have 3 quick questions. First one on working capital. Because as in the previous quarter, you had a very strong quarter in terms of working capital, and I would like to understand the reason for this strong performance. And is this the seasonal move and we can expect during the rest of the year, some kind of reversal of the strong performance in the third quarter. Second question regarding real estate. Just if you can give us the amount that will be paid by the new portfolio, Sierra, as a manager of the portfolio?

And last one. If you can give us also an update regarding the wage increase being negotiated with union?

Joao Bento

Thank you, Filipe. I'll start with the wage increases and then hand over to Guy. So, we have closed the deals, agreements with both CTT and CTT Express at 4.6% and 4.9%, respectively. And we have already accounted for that, starting from January because the agreement applies to January. So it is already reflected in the accounts of this quarter, the contribution of those values that increased during this year.

We see here a couple of positive things. One is that this increase is clearly to inflation. And the other one is that it was in both situations. With CTT, it was a longer process. With CTT Express, it was a faster run and it happened after the first CTT agreement.

We struck the agreement with all the unions and therefore, it provides for the kind of level stability -- leverage and stability that we like and we need for the transformation process that we are involving. So, I think it's good news in this front.

Guy Pacheco

Then on working capital, Filipe. So last quarter, the reasons for working capital, it was better management of accounts receivable and accounts payable. But as I mentioned in the previous call, we shouldn't expect any reversals on that front. The reasons for this quarter are, part, is the same trend, but another part has to do with the way we account revenues from Financial Services. As we know -- as you know, we have this contract that has 2 steps in terms of remuneration and we accrue revenues with our average expectation of what will be the blended remuneration for CTT throughout the year. As such, we -- in terms of cash flow, we received upfront more money than it flows through the operation.

That's why we have a part of working capital for that reason. So, we should expect that part of this working capital performance will reverse, but not in its entirety. In terms of Sonae remuneration, we don't feel comfortable disclosing specific numbers, but you can assume that is in line with market practices.

Filipe Leite

Okay. If I may just a follow-up on working capital. Can you give us an idea of the amount related with this accounting -- way you account the financial revenues?

Joao Bento

It's not an easy way to answer, but you can assume that it's more or less half of the amount. But nevertheless, we see this year being a strong year in cash flow generation. I wouldn't be very focused on working capital.

Operator

Thank you. [Operator Instructions] We will take the next question from line Antonio Seladas from AS Independent Research.

Antonio Seladas

So the first one is on the visibility on saving certificates -- placement of savings certificates for the second half of the year. My feeling is that visibility is too low. Nevertheless, I would like to know your opinion on this or if you could share with us your opinion on this issue? And second one is related with the bank portfolio and the cost of credit risk is now stabilizing at 1.4%, 1.5%, which is okay, fine. Nevertheless, the NPE ratio is still increasing. And I guess that the credit card versus the portfolio is already coming down.

So maybe you can explain why the NPE is still increasing, the ratio is still increasing, the economy is doing well, unemployment is low? And if you can provide some color by the end of the year, what kind of cost of credit risk the bank should have without the credit card loans?

Joao Bento

Thank you, Antonio. So regarding the first question on debt certificates, what we are observing is that we saw now a slowdown on these levels, but through values that are much, much above what they were before. So what we are seeing is that we see no reasons in our interactions with treasury and IGCP, we don't see any dynamics to change things soon. And so our expectation is that it will be not as strong as it was in the first quarter, but much stronger than it used to be before. So that's the outlook and our assumption.

Guy Pacheco

On the cost of risk of Banco, first, you are right, we are seeing already a decline on the credit card portfolio. And as such, mechanically, it's putting pressure on the cost of risk. Regarding the end of the year, without credit card portfolio, we see our cost of risk coming below the 1% threshold.

Antonio Seladas

And regarding the NPEs -- the ratio NPE is still increasing and I think they are increasing sequentially quarter-on-quarter.

Guy Pacheco

In our view, the same mechanics applies for the NPE of the reduction of the credit card portfolio versus the NPE ratio quarter-on-quarter.

Operator

We will take the next question from Joaquin Garcia from JB Capital.

Joaquin Garcia

Yes. Most of them have already been answered, but I just had a question regarding the increasing guidance for the year. I just want to make sure, does the majority or all of the EUR9 million increase in recurring EBIT comes from the better-than-expected performance of the financial segment? And then regarding the guidance for the year, do you still expect high -- well, not high but double-digit growth in Spain and low growth in Portugal after seeing the performance of this first quarter?

Joao Bento

Thank you, Joaquin. So on guidance, why has it improved? Let me remind you that, as we mentioned in our past conference call, our guidance had embedded an expectation that growth will happen in every end of business lines. And this is very important to keep in mind. We had a guidance statement back in the previous conference call that provided for improvements related with the pending macroeconomic risks and Financial Services problems.

That's why it was open on the right-hand side. Well, in the quarter, now we've seen the performance of Financial Services above our initial expectation and the confirmation of positive trends in Mail and E&P Portugal. And we also developed confidence that Spain will improve. Reason why we have decided to raised the guidance. So in a way, we have translated the above-than-expected performance in Financial Services, but the confirmation that Mail and Parcels is going okay.

It also helps us in that decision. For the E&P, I will ask Joao Sousa, our Executive Team colleague to answer.

Joao Carlos Sousa

So, we are confident on the double-digit growth in Spain for this year. And when we look for Portugal, we believe that we're going to stay in this good momentum we are seeing. And that's it.

Guy Pacheco

And just complementing that, we saw single-digit in Portugal, initially our expectations, but recent trends are positive above that, so in double digits.

Joao Carlos Sousa

Maybe I can give just a little bit more color about Spain, why we believe on this. So, we see the strategic -- the commercial strategy we implemented the last quarter of last year. We see now the results. So, we are seeing growth on SMEs and big clients that's going to help us to create a differentiation in the portfolio of our customers and also some positive funnel in the, what we call, strategic clients or international clients. So that's -- when we look for this funnel, that's what we believe in the number we are seeing right now.

Operator

Thank you. It appears no further questions at this time.

Joao Bento

Okay. If no more questions, thank you all for coming and for your questions. We remain, as always, available to you and our IR team, and looking forward to meeting you soon. Thank you very much. Good morning.

Operator

Thank you for joining today's call. You may now disconnect.

For further details see: