LATAM Airlines Group - Q2 2023

Transcript

Operator (participant)

Good day, ladies and gentlemen, and welcome to the LATAM Airlines Group Earnings Conference Call 2Q 2023. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, such as constitute forward-looking statements. Any matter discussed today that are not historical facts, particularly comments regarding the company's future plans, objective, and expected performance or guidance, are forward-looking statements. These statements are based on a range of assumptions that LATAM Group believe are reasonable, but are subject to uncertainties and risks as discussed in detail of CMF and SEC filings.

The company's actual results may differ significantly from those projected or suggested, and any forward-looking statements to the variety of factors which are discussed in detail in our SEC filings. If there are any member of the press on the call, please note that for the media, this is a listen-only call. I would now like to hand the conference over to the CFO of LATAM Airlines Group, Ramiro Alfonsín. Please go ahead.

Ramiro Alfonsín (CFO)

Thank you, Roberto. Hello, everyone, and good morning. Welcome to our Second Quarter 2023 Conference Call, and thank you for joining us today. My name is Ramiro Alfonsín, and I am the CFO of LATAM Airlines Group. Here with me today is Mr. Roberto Alvo, CEO of LATAM Airlines Group, Andrés del Valle, VP of Corporate Finance, and Tori Creighton, Head of Investor Relations. We will present our highlights and results for the second quarter of 2023. I'd like to pass the presentation to Roberto for some opening remarks before we go into the numbers.

Roberto Alvo (CEO)

Thank you, Ramiro. Good morning to everyone. I'd like to start commenting that ultimately, I think that the second quarter results are a clear demonstration of the new LATAM post-restructuring, and it's great to see this new LATAM and how it is working. The LATAM Group has an ever-strengthened network today, a leading value proposition for customers, a business and geographic diversification model that is unique, and a rigorous cost discipline that followed with saving initiatives implemented in the restructuring process, are complementing our very strong balance sheet as well. On top of it all, in June, LATAM definitely exited Chapter 11. It was the case officially closed before the US Bankruptcy Court.

The terms of financial highlights in the second quarter of 2023, we are reporting a double-digit adjusted operating margin of 10.1% and a bottom line net income of $145 million. This result was mainly driven by the increase in passenger operations, a healthy demand context, amid decreasing jet fuel prices, and of course, reinforced by the group's unique value proposition and the preference of its customers. I am very pleased that the group's customers choose LATAM for the fourth consecutive year as the best airline in the region at the Skytrax World's Best Airlines 2023 ceremony. Please join me on slide 2. This quarter is a unique quarter, as we have reported the best second quarter in the history of LATAM.

We are seeing healthy demand levels that contributed to the positive second-quarter results and make us cautiously optimistic for the future as the booking curve continues to reflect stability. During this quarter, second quarter, we reported a demand increase of 28.6% compared to the second quarter of last year, where the international demand continued recovering and increased by 44.5%, reaching a capacity of approximately 80.5% as compared to the same period in 2019. Regarding consolidating capacity recovery, we reached 93% versus the same quarter of 2019. In the second quarter, the group continued to strengthen its irreplicable network, operating 143 passenger destinations as of today. The JV with Delta Air Lines is progressing, and during the first half of the year, six new routes have been launched.

Together, LATAM and Delta are number one in share of routes connecting South America to North America within the JV scope. Furthermore, as we mentioned in our last quarterly conference call, LATAM Airlines Colombia added 5 aircraft to its market, increasing its capacity by approximately 20%, and consequently increased its market share to 33% during the second quarter from 24% in the previous quarter. As I said before, we had a record second quarter. The adjusted operating income was $271 million, with a 10.1% adjusted operating margin, and we posted a record adjusted EBITDAR for the first half of the year, reaching $1.1 billion. It is important to highlight that the results of the new LATAM are not just reflected on our P&L, but also on our capital structure.

We continue improving our balance sheet ratios, reporting a total liquidity of $2.6 billion and generating $110 million of cash this quarter. We also managed to reduce our adjusted leverage to 2.4x from 3.0x in the previous quarter. Lastly, having incorporated the strong results in the first half of the year and looking at the stable demand environment, we decided to raise our guidance for the full year of 2023, forecasting an adjusted EBIT margin of 10%-11% and an adjusted EBITDAR of $2.35 billion to $2.5 billion for the whole year.

This is all made possible by the support of the more than 34,000 employees that make up the LATAM Group, and work hard to pursue, to push ourselves to be better and deliver continuously superior product to our passengers. A big thank you to all of them, and a big thank you to our customers for their loyalty. With that, I turn over to Ramiro to continue with the presentation.

Ramiro Alfonsín (CFO)

Thank you, Roberto. Without a doubt, we are all energized with the results of this quarter and how LATAM is performing. Digging deeper into the various points that Roberto mentioned that contributed to our very strong second quarter results, I'd first like to comment on the demand environment on slide 3. We have seen a healthy demand environment, and the group sustainably increases capacity in line with it. In the second quarter, the group noted a consolidated capacity increase of 28% compared to the same period of last year, with demand increasing 28.6% and the resulting load factor of over 80%. The group's revenue per ASK reached $0.07, showing an increase of 3.5% compared to the second quarter of 2022, all this in a context of fuel prices 29% lower than the previous year.

Capacity in domestic Brazil increased approximately 18% compared to the second quarter of 2023. Capacity in domestic Spanish-speaking countries, referring to domestic operations of LATAM affiliates in Chile, Colombia, Ecuador, and Peru, grew 6.5% year-over-year. International operations are the strongest drivers of both demand and capacity growth. Capacity increased 48%, and we reported a healthy load factor of 83% during the period. Revenues per ASK on the international segment increased 4.7% versus the second quarter of 2022, reaching $0.067. When we look at the LATAM Group affiliate market shares on Slide 4, we know that they continue to be highly competitive in all the different segments where we operate. During the second quarter, LATAM Airlines Brazil increased its domestic market share to 38%.

The Brazilian domestic network has continued to increase with the implementation of the new codeshare with Voepass, which added 13 new destinations for our customers. In the second quarter of 2023, LATAM Airlines Colombia domestic market share increased significantly to 33%, as Roberto mentioned. LATAM Airlines Chile is number one in domestic market share, with a second-quarter market share of 57%. It also increased frequencies to Easter Island to six flights per week, improving the connectivity and tourism to the iconic island from the continent. LATAM Airlines Peru reported its domestic market share of 61%, and LATAM Airlines Ecuador posted a 40% market share in its domestic market. During the first half of 2023, the group transported 34 million passengers. That is 20% higher than the first half of 2022.

By far, more than any other airline group in the region, and we carried 20 million passengers in the group's domestic operations. This is a result of the leading market shares, accompanied by an efficient cost structure and healthy levels of liquidity, allowing for continued organic growth. Please join me in slide five. LATAM Group international operations continue to increase. As we have seen, international operations are the current key driver of growth, growing 48% over 2022. The international operations now represent approximately 40% of LATAM's total revenues in the first half of the year. Within the South American countries, the group operating 43% of travel occurs on a LATAM Group aircraft.

Notably, LATAM Group has the highest market share on routes to North America, reaching a capacity share of 19% between North America and South America, which increases to 26% when adding Delta's capacity share, now operating under the JV agreement. Regarding the JDA, 3 new international routes were announced this quarter, and another route is increasing frequencies. In the second half of the year, LATAM Group will connect South America to four continents with the return of LATAM Airlines Brazil, São Paulo to Johannesburg route. In this context, our Brazilian affiliate also announced an agreement with the South African carrier, Airlink, adding 40 new destinations to the network, facilitating new destinations for our customers. LATAM is very proud of the important presence that the group has been able to build throughout its entire network, in a growing segment as international travel is.

Let's take a look at the results of the quarter on slide six. In the second quarter, LATAM noted a record second quarter. Adjusted EBIT margin was over 10%, and adjusted EBITDA amounted to $559 million. Total operating revenues increased 20% compared to 2022 levels. As operations continue to recover, passenger revenues increased approximately 33% over the same period of 2022. Cargo revenues, on the other hand, registered a 23% decrease, mainly explained by the softening of the cargo yields, but are still over 2019 levels by 26%. Total adjusted operating expenses during the quarter increased by 2.8% versus 2022. This is mainly explained by a 28% increase in the operations, and offset by the 29% decrease in fuel prices during the quarter compared to 2022.

Ex-fuel adjusted operating expenses were up 12% from 2022 levels, while our capacity increased by 28%, speaking about the efficiencies that the company is generating while growing. LATAM reported a passenger CASK ex-fuel of $0.043, 10% lower than 2022, reflecting the group's important cost saving implemented. Net income, as Roberto mentioned, amounted to $145 million in the second quarter, and $267 million for the first half of the year. The group also generated cash by $110 million, therefore improving our liquidity position to $2.6 billion. Last but not least, we are presenting our total fleet cash cost for the quarter. That was $180 million, and in the first half of the year, is $379 million.

As we have mentioned before, it's important to note that this singular fleet cost is extremely competitive and based on the unique prices we negotiated in Chapter 11. As you can see in the next slide, LATAM Group has seen a sustained ramp-up in its capacity. Recovery has allowed us to reach 93% of 2019 operations in the last quarter. Compared to a year ago, last twelve months, EBITDA generated generation almost tripled, generated nearly $2 billion in the last twelve months. This is our seventh consecutive quarter of positive EBITDA. Let's turn to a summary of our cash flow statement on slide eight, which is a critical part of the financial statement, and we consider cash flow generation to be the true measure of a company's performance.

In the second quarter of 2023, LATAM generated a positive cash flow of $110 million, driven by a very strong adjusted operating cash flow of $541 million in the quarter. This strong result was mainly due to the recovery in operations and the ramp-up in demand during the first part of the year. As a result, LATAM was able to cover its investments, including maintenance and growth, which mainly consisted of engine maintenance, part of which were staggered during the pandemic, resulting in a positive unlevered free cash flow of $276 million for the quarter. Engine shop visits and other supply chain delays have pushed CapEx to the second semester, and we expect to be in line with our forecast by the end of the year.

This is the third quarter with positive cash flow generation for LATAM. Let's turn to our main financial ratios on slide 10. LATAM Group liquidity reached $2.6 billion this quarter, and presented $1.5 billion in cash and cash equivalents. This represents 24% of liquidity as a percentage of the last twelve months' revenues. In terms of leverage, the group reached an adjusted leverage of 2.4x, the lowest since 2012. This capital structure sets the group apart and allows us to be extremely competitive and to look for growth. When we look at our debt maturity profile, it's important to highlight that LATAM has no significant non-fleet debt maturities in the next four years.

As of today, LATAM only has maturities coming from our exit financing due in 2027, including the $450 million five-year notes and the Term Loan B of $1.1 billion. It is worth mentioning that the five-year notes and the Term Loan B, both amounted to more than half of the exit financing, can be refinanced starting the fourth quarter of 2024. Please join me on the next slide. As Roberto mentioned, on the back of our strong results in the second quarter and the stable demand environment, we raised our guidance with a better perspective for 2023. Our adjusted EBIT margin forecast for the full year is now 10%-11%, with a considerable increase from the previous guidance of 6%-8%. Adjusted EBITDA increased to between $2.35 billion to $2.5 billion.

We expect to finish the year with 2.4-2.5 of adjusted leverage, considerably lower than the 3x originally announced in the January guidance, and explained by the decrease in the net debt and the expected operational results for the year. On the next slide, with regard to our fleet plan, we all know that the industry is facing important capacity constraints in light of delays for aircraft deliveries and engine maintenance. This is a reality that will probably have an impact in the next years, and in that context, it's important to note that we have important orders with manufacturers, and this year we have already received 6 aircraft. Furthermore, we will be receiving aircraft directly from the source that will complement the new fleet deliveries.

We are very confident in our ability to deliver on our guidance for the full year 2023, and the fleet plan growth, given this mix of new and previously leased aircraft, and the flexibility in retirement management strategies that we have in our current fleet. During this quarter, we have advanced on ESG initiatives, specifically with regard to climate change and circular economy. Within the climate change pillar, this quarter, LATAM Group started the program 1+1 Offset to Conserve. This program offers LATAM's Group passengers the possibility to help protect and conserve iconic ecosystems of our region and their biodiversity. For every ton of CO2 that is compensated by customers, LATAM compensates the same amount, doubling the impact. LATAM Airlines Colombia announced the partnership with Bio-D, one of the main companies in Colombia, leading the search for sustainable energy solutions.

We seek, which seeks to develop enabling conditions for SAF production in the region through the exchange of best practices, information, and technical knowledge. Also related to sustainable fuel, LATAM Group partnership with Kuehne+Nagel, and The Elite Flower purchased 25,000 liters of SAF to reduce emissions equivalent to a Bogota to Miami cargo flight. Within the circular economy pillar, LATAM Cargo affiliates were distinguished by IATA as winners of the Cargo Innovation Award for its plastic reduction projects in its cargo operations in Chile and Brazil. The initiatives were designed by employees of the cargo affiliates and are part of the group's commitment to achieve zero waste to landfill by 2027. Finally, LATAM Group reached 88% reduction of single-use plastic in onboard passenger services and 82% reduction in the group's total operations.

In summary, to finalize in slide 14, within a context of a healthy demand environment, LATAM Group increased its capacity by 28% and is strengthening its network, in particularly reinforcing the JV with Delta Air Lines. Our international capacity grew 48% this quarter, with a healthy load factor and revenue per ASK. On the back of a very strong second quarter, in which LATAM reported a double-digit operating margin, adjusted EBITDA of $559 million quarter-over-quarter, cash generation and liquidity improvements reaching $2.6 billion, and an adjusted leverage of 2.4x, we have announced improved guidance. LATAM raised its projection of adjusted EBIT margin to 10%-11% for 2023, and an adjusted EBITDA between $2.4 billion to $2.5 billion.

The strength in network, cost structure, capital structure, and the leading South American brand continue to set the group apart, and the second-quarter results and fiscal year guidance projections reaffirm that the LATAM Group business model is working. Thank you, and I will turn now the call to the operator for the Q&A segment.

Operator (participant)

Ladies and gentlemen, we now begin the question-and-answer session. If you wish to ask a question, please press star one one on your telephone. We are now taking the first question. The first question from Guilherme Mendes from JPMorgan. Please go ahead. Your line is open.

Guilherme Mendes (Executive Director, Equity Research - LatAm Transportation)

Thank you. Good morning, Roberto, Ramiro, Andres, and Tori. Thanks for taking my question. I have two questions. One is a follow-up on the guidance. We see the capacity was slightly revised downwards, but still, revenues and margins was revised upwards. I guess part of that is related to yields, which has been surprising to the upside over the past few quarters. Just wondering, what is the outlook for yields for the second half of this year, and which region you are seeing most upside on? The second question is regarding Colombia. What is the outlook post the visa situation? We are seeing that you are adding more capacity in the region. If I'm not mistaken, on the previous call, you mentioned about getting to 35% market share or so. It seems we're pretty close to it.

Just wondering what the additional capacity addition we should see over the next few quarters? Thank you.

Roberto Alvo (CEO)

Thank you, Guilherme. This is Roberto. Good morning to everyone. On your first question, yes, capacity is a little bit lower, and this is mostly related to aircraft fleet delays, particularly on our wide bodies. We are not seeing, I think, at this point in time, a significant change in our demand environment expectations for the remainder of the year. We are adjusting basically capacity based on the ability we have to operate the fleet we have and what we expect in terms of aircraft delivery, deliveries. Having said that, I don't think that any potential delays, whether it's the engine manufacturing side or the delivery of aircraft, is going to be relevant for our operation for the remainder of the year. In terms of our domestic operation in Colombia, yes, we reached 33%.

Slots for the winter season in the Bogota Airport were awarded a few weeks ago. We're very happy with the result. We hold now, I would say, a very significant and important slot allocation for the Bogota Airport that allows us to have, particularly for the corporate market in domestic Colombia, a very good product. We feel good and confident with respect to what we have achieved in Colombia. For the remainder of the year, as we said, we have included these five aircraft, and we're going to operate a network that I think will help Colombians see LATAM as a real alternative to traveling, not only within Colombia, but also internationally.

Particularly, in our JV with Delta, we announced a Miami-Bogota flight, a Bogota-Orlando flight, and Delta will operate a Cartagena-Atlanta flight as well during the remainder of the year.

Guilherme Mendes (Executive Director, Equity Research - LatAm Transportation)

Many thanks, Roberto. Just one follow-up on the yield side, if you see any upside on the new guidance?

Roberto Alvo (CEO)

Yeah, yields are embedded in our guidance at this point in time, but if I can give you a sense, I think that we see demand stability, and I don't think that we will see, hopefully, any major changes with respect to what we have posted in the first semester on average.

Guilherme Mendes (Executive Director, Equity Research - LatAm Transportation)

Super clear. Thank you.

Roberto Alvo (CEO)

Thank you.

Operator (participant)

Thank you for your question. We are now taking the next question. The next question from Andre Ferreira from Bradesco BBI. Please go ahead, your line is open.

Andre Ferreira (Head of Transportation Equity Research)

Hi. Good morning, guys. Thank you for taking, for taking my question. Can you provide a little more color on the international markets? First, how is demand in, in the different markets? Second, related to the capacity expansion, in what regions should your, your focus be, and where do you see the most opportunities? Thank you.

Roberto Alvo (CEO)

Yes. Andre, I think that we see good, good demand in more of the international segments. I would say that Europe probably has been a little bit stronger than the U.S. I think that there's, there's, there's a good reason for this, and, and what, and, and, and it is that as, as the pandemic stopped the issuance of visas for Brazilians to the U.S., there's a long queue for those being, being given back in Brazil, and that's easing up. I would say that it marks a little bit of a delay, probably in the issuance of visas to the U.S. Because you don't need a visa to Europe, you can see a little bit the difference of point of sale strength. Both long haul to the U.S. and Europe are healthy.

South Pacific has returned nicely as well. What has been always a little bit behind since the beginning of the pandemic, is what we call regional, which is international within South America, but this is where we have seen probably the biggest recovery in this quarter. I would say that, the pockets of weakness today in international are very limited, and they're more related to still lingering effects of the social crisis or the crisis, political crisis that happened in Peru in the beginning of the year, and inbound traffic from Europe and the US, and probably passengers decided to book for the, for the summer season going elsewhere than Peru on that situation. We have seen a recovery, but this is probably the place where, we have seen a little bit more lag.

Otherwise, I would say that, that international has returned, in, in, in a healthy fashion.

Andre Ferreira (Head of Transportation Equity Research)

Perfect. Thank you.

Operator (participant)

Thank you for your question. We are now taking the next question. The next question from Karan Madan from Barclays. Please go ahead, your line is open.

Karan Madan (Latin America Regional Head and Head of Latin America FICC Trading)

Hey, good morning. Congratulations on the quarter. I have two quick questions. When I look at the guidance for net debt at the end of the year, obviously, a, a decent amount of growth from net debt here today, $900 million to $1 billion. Curious if you can help us understand the drivers behind the, the increase in net debt between now and the end of the year. The second question I have is related to cash flows. Non-fleet CapEx or fleet CapEx and, and non-maintenance CapEx, you're tracking about $100 million, year to date. In your business plan coming out of the bankruptcy, that number for the year was a lot higher than on the, on the full year. Is this just a timing, issue, where y- you're seeing a reduction in the need?

Is this kind of a new run rate that's slower than what you guys expected initially? Thank you.

Roberto Alvo (CEO)

Yes, thank you, Karan, for that question. This is Ramiro. On the net debt, there is no incremental debt on, on the financial side. We have ample liquidity to operate our operations there is no forecast of incrementing financial debt itself. We are receiving aircraft into the second half of the year, and that is, that shows per IFRS 16 in our debt, and therefore, you see that increase in the net debt. We are expecting to receive those aircraft in the second half. Regarding non-fleet CapEx, we have been cautious during the beginning of the year regarding our CapEx investments.

We think that we're going to be meeting our forecast for the remaining of the year, in line with the business plan, as we're going to be recovering the pace on engine maintenance, because there are some delays, but we expect to recover them during the second half of the year. We should, we should be in line with the business plan, Karan.

Karan Madan (Latin America Regional Head and Head of Latin America FICC Trading)

Okay, thank you very much. One last question, if you don't mind. The CASK ex fuel guide, higher, versus the last guidance, can you just help us understand, the drivers behind that? Thank you.

Roberto Alvo (CEO)

Yes, absolutely. It's a little bit embedded by. Because we trimmed a little bit of capacity. The second factor, I would say that's the most important one, is the exchange rates. We have seen appreciation of currencies in the whole region, particularly the Brazilian real, but also the Chilean peso and the Colombian peso, so that when you look in dollar terms, that is impacted, impacting our CASK ex fuel. All the initiatives that we have forecasted in terms of cost savings are, are producing the results we anticipated, we're well on track on the initiatives. There is an impact of the exchange rate.

Karan Madan (Latin America Regional Head and Head of Latin America FICC Trading)

Understood. Thank you.

Roberto Alvo (CEO)

Thank you.

Operator (participant)

Thank you for your question. We are now taking the next question. The next question from just Andrés Cardona from Citi. Please go ahead. Your line is open.

Andrés Cardona (Director, Equity Research - Infrastructure, Airports, and Energy)

Hey, do you hear me?

Roberto Alvo (CEO)

Yes, we can.

Andrés Cardona (Director, Equity Research - Infrastructure, Airports, and Energy)

All right, perfect. Thank you. My first question is, do you have any updates on the level two ADR listing? As a follow-up, could you walk us through a little bit about why you adjusted the wages on your earnings and not just aircraft rent-related items, when you gave us the adjusted earnings for the quarter? Thank you.

Roberto Alvo (CEO)

Yes, thank you. There, there's no update yet, where there are various factors that we're considering for the right timing for the ADR relisting. We're going to keep the market informed when once a decision is made. Regarding the adjustments, well, basic adjustment, there, there are two significant adjustments. One is the PDH, the payment by the hour. During the Chapter 11, we negotiated some flexible terms with certain counterparts that allow us for a payment to accounting measures, you still have to depreciate your assets and also account for the PDH under aircraft rental. There's a sort of double counting on the, on the P&L of the fleet cost, and that is why we're adjusting the PDH.

On the wages itself, it's because during the Chapter 11, it was approved that corporate incentive plan that is linked as a bonus, and other companies do not have this mechanism. In order for analysts to compare better with other companies, we are also adjusting that, that portion. That portion of the corporate incentive plan in the second quarter was approximately $10 million to $11 million.

Andrés Cardona (Director, Equity Research - Infrastructure, Airports, and Energy)

Awesome. Super helpful.

Roberto Alvo (CEO)

Thank you.

Operator (participant)

Thank you for your question. We are now taking the next question. Please stand by. The next question from Neil Glynn, from AIR Control Tower. Please go ahead. Your line is open.

Neil Glynn (Founder and Managing Director)

Good morning, everybody. The first one, you've obviously reported a record second quarter, and this is becoming an increasing theme in Europe, APAC, U.S., almost everywhere. I'm wondering, how does this make you think about sustainable margin levels beyond such a strong 2023? How do you think about this period as an exceptional period as capacity comes back versus the permanent effects of the strength you're seeing? The second question, I realize it's early in the stage of life of your joint venture with Delta. Delta obviously has an expansive network of fellow partners around the world. I'm interested how you think about the opportunity of leveraging this on flows that don't touch the U.S., as you continue to grow your international and intercontinental businesses.

Roberto Alvo (CEO)

On the first question, we're not commenting on beyond 2023 at this point in time. However, I get the sense we have here is that we have seen a healthy demand recovery, and when we try to estimate the spend as % of GDP in the region, where data is not really great, we don't see a significant deviation as to pre-pandemic levels. We see demand in 2023 as a good baseline for thinking about growth in the future. Of course, this industry is related very, very clearly to GDP, and we will see what happens with the economic projections in the region going, going after. We don't see 2023 as an exceptional year in terms of demand.

I think that we're still seeing the final probably bits of the recovery period, arriving to a place that doesn't look to be very different than what air travel was before the pandemic. In that sense, we take this environment as a good recovery progress point from what the last three years have been. Regarding the second question, second question? JV. At this point in time, our focus is implementing our JV with Delta. This is eight months old, only. I'm very pleased with how the teams are working and the results we're seeing. Our passengers are clearly having a better sense of the opportunities that a JV provides.

Launching seven routes, or announcing seven routes in six or seven months, I think is a record for a JV, and we're very happy with the results. Of course, we look forward to seeing how we increase the network of our commercial relationships going forward. At this point in time, I think that the focus is in making sure that the JV with Delta is, is successful.

Operator (participant)

Thank you for your question. As a reminder, if you wish to ask a question, please press star one one on your telephone. Please, star one one if you wish to ask a question. There are no further question at the moment. I will hand the conference back to management for closing remarks.

Roberto Alvo (CEO)

Thank you. Thank you everyone again for joining us today. Again, as always, our investor relations team is around for any further questions. Have a very nice day. Thank you.

Operator (participant)

That concludes the conference for today. Thank you for participating. You may all disconnect.