Daniel, you can start now.
Thank you. Hi, good afternoon, everybody. Welcome to ArcelorMittal's Q3 2018 analyst and investor call. This is Daniel Fairclough from ArcelorMittal Investor Relations team, and I'm joined on this call today by our Head of Finance, Genuino Christino. We're here to answer your questions on the results published this morning. As usual, this call is being recorded. Hopefully, everybody's had the chance to read our earnings statement and the supporting Q&A document and the presentation with the detailed speaker notes. All of those were published on our website this morning. The plan today is for a call to last around 45 minutes or so to address any questions you might have on those results. We're going to answer the questions in the order that they're received.
If you would like to join the queue to ask a question, please do press star one on your telephone keypad. With that very brief opening, Genuino and I are ready to take your questions, and I think we're going to start with Yannis at Macquarie.
Gentlemen, a couple of questions on my side. First of all, on Essar Steel, I appreciate the deal has not closed yet, but could you perhaps provide rough guidance on the upfront balance sheet impact and whether you have hedged the currency risk? Also with that, I see you lower your long-term growth ambition from 20 million tons to 15 million tons. Could you perhaps elaborate the underlying reasons and discuss whether you need to own an EPC business to deliver the brownfield expansion? I'll leave it there. Thank you.
Great. Thanks, Yannis. To talk about the impact of Essar on the balance sheet, obviously we published a press release detailing the offer that's been accepted by the committee of creditors. We have a payment to the creditors of $5.7 billion. We also have a $1 billion payment to the creditors of UG and KSS, which we agreed previously. Then there's a $1.1 billion equity injection into the joint venture in order to kickstart the turnaround, the improvement, and the CapEx cycle there. As we talked about previously, the expectation is that that JV will be funded on a ratio of 2 to 1 in terms of debt to equity. Two-thirds of the numbers that I just talked about will be funded at the JV level with debt, and one-third will be contributed by the equity partners, ourselves and Nippon Steel.
Hopefully that gives you the right sort of framework to be calculating the impact that you're going to see on our balance sheet in terms of cash flow and net debt, assuming we close this by the end of the year. I'll let Genuino talk about hedging.
Yeah, thank you, Daniel. Yannis, as you can appreciate, this is really market sensitive, we are not really in a position to comment right now on the hedging.
Just to be clear, in terms of our plan for the asset, our near term or medium term plan is to obviously improve the production level to 8.5 million tons. That's what we've committed to as a medium term objective in our resolution plan. The resolution plan sees a medium term to long-term ambition to take the capacity up to 12 million-15 million tons. The intention is to obviously use Essar as a vehicle to participate in the growth that's anticipated in the Indian steel demand and production, and its significant prospects, which we all know about based on the current relatively low levels of steel intensity and per capita consumption in India today. They're roughly a third of global average levels.
A lot of expectation for growth in the years to come, and Essar will provide us with a vehicle to participate in that growth. Move on to the next question from Alain at Morgan Stanley, please.
Yes. Good afternoon, gentlemen. Two questions, if I may. Firstly, on the profit bridges between Q3 and Q4. It seems that you have incurred a few one-offs in Q3, such as the hyperinflation adjustment, operating stoppages in Europe, and if I'm not mistaken, in the U.S. Is it possible to quantify those quote, unquote, "one-offs" to see how these profit bridges will evolve? That's one. Two, we are in November now, and I presume you do have a good overview of your CapEx guidance for 2019. Can you give us a flavor of the ranges of spending you do expect to incur next year? Thank you.
Let me try to address your first question, Alan. Yes, you're right. In Argentina, we had now for the first time the impact of hyperinflation, that's about $100 million. It's hard to predict whether this is going to repeat in quarter four. I would expect no. Only the reason why it happened this quarter is primarily because you have a disconnect between how you index the local financials in pesos and the translation. There is a disconnect between the exchange rate movements and the inflation used for the indexation. To the extent that in quarter four that stabilized, then you're not going to have a repeat of that impact, and we have a normal contribution from our Argentinian business. In terms of the operational issues that we experienced in Europe in quarter three, roughly this is about 400 KT.
We expect that this will not reoccur in quarter four. We would expect our shipments in quarter four for Europe, and for the group as a whole, excluding any impact that we will have from Ilva, to be at similar levels as we saw last year. In NAFTA the wait-and-see approach that we experienced in quarter three, also meant for us about 400 KT, not only in U.S., but also in Canada and probably a little bit more pronounced in Mexico. We would expect, based on what we can see right now in our order book, we would not expect that to reoccur. Looking to Q4, we would expect our shipments in NAFTA to be stable compared to quarter three, given that, as you know, in quarter four, traditionally, we have some seasonality in NAFTA.
Does that help, Alain?
Yes. A quick follow-on on this question. I think you also had some operating issues in the mining division as well. Is it possible to just put a number behind the impact, the dollar impact in Q3? That's the first part of my question.
In quarter three, Alain, you see that our marketable shipments were down. Primarily we had two issues. One was the wet season in Liberia, which we hope it will not repeat in quarter four. We have also some of the issues that coming from the pit issue that we announced in quarter four of last year, 2017. We have been shipping a little from inventories. That's why you see now this reduction in the shipments also coming from Mines Canada. Today our run rate is back to the normal levels. We would expect production to be back to the normal levels in quarter four. However, we're not going to be able to recover the shipments that we lost during quarter three, and that's why we are revising our guidance of marketable shipments from 10%-5%.
Great. Just to come back on your question on CapEx plans for 2019. Obviously, we'll give you some firm guidance with our full-year results. I think directionally, clearly CapEx is expected to increase next year. If you think back to our Q2 results, we did announce at that point that we were going ahead with our downstream expansion at Vega in Brazil. We also talked about the study that we were doing to potentially look to add a concentrator at our Liberian iron ore operations. We're still waiting for the detailed feedback of that study before the board moves forward with a decision. The bigger driver is obviously going to be Ilva. We have the confirmation today that we've taken ownership of Ilva.
If you think about 2019 versus 2018, there will be a step-up in our CapEx, just reflecting the Ilva work that we're going to be undertaking. Hopefully you can see some of the components there. As I say, come our results in February, we'll give you a much more detailed overall picture. Great. We'll move to the next question, please, from Seth at Jefferies.
Good afternoon. Thanks for taking my questions. I have two on the U.S., then one specifically on Ilva. On the U.S., on the NAFTA business. Obviously, your NAFTA operations have been hit by tariff bringing material across U.S., Mexican, Canadian borders. Can you quantify how much those tariffs cost you? If 232 changes to quotas rather than tariffs, in aggregate, would that hurt or help your NAFTA business? Secondly, within the NAFTA realm, can you comment at all about auto contract negotiations? We've heard from some of your peers some constructive outlook going into 2019, but we've heard from the automakers more pushback in their ability to control that cost. Do you see upside to your margins on the back of auto contracts? Then I'll let you start with that, and I'll come back for one question on Ilva, please.
Seth, let me take your first question on the impact of the tariffs. In quarter two, we had basically one month of impact, right? Because for Canada and Mexico, the tariffs kicked in in first of June. Now in quarter three, then you have the full impact of that already in our results. In terms of quantification, basically quarter on quarter, it's about $60 million negative to us. Overall, I think it's clear that net Section 232 is a benefit for us.
On the topic of auto contracts, I think obviously 2018 has been a good year for ArcelorMittal and the steel industry. An area of our business that hasn't really seen a significant improvement is the auto volumes because we haven't had a major opportunity to reprice those tons. We are obviously starting the negotiations for quite a lot of that business. There's a majority of those tons which reprice on a 1st of January basis. They survey reprice on the 1st of January, we're renegotiating those contracts now. I think we go into those contract negotiations with a lot of optimism. The industry has significantly improved over the past 12 months. If you look at where steel prices are today versus where they were 12 months ago, that's a positive sign.
There is raw material inflation, which we need to factor into those contracts as well. Finally, we're consistently providing innovative solutions for our customers to help them achieve their objectives. That's costing us money in terms of R&D dollars. It's costing us money in terms of the CapEx that we need to spend in order to have the industrial capacity to provide those solutions. It's only fair that we are compensated for that. All told, I think we go into those negotiations, as I say, with a degree of confidence.
Forecast unchanged EBITDA accretive year one on 2016 conditions. Clearly, the European market strengthened a lot since then, although it seems like Ilva's performance has perhaps deteriorated. Can you give us any sense on how you expect Ilva margins to compare to core ArcelorMittal Europe in the coming years? Then when we take into account the known disposal remedy assets, should we still expect net net earnings accretion, or will there be something different than that, at least in the early years? Thank you.
Yeah, thanks. Just to confirm what we said previously, which is we expect Ilva to be EBITDA positive in the first year, free cash flow positive in the third year. I think it's fair that the operating performance of that business has deteriorated over the past 12 months, at the same time, the overall industry conditions have improved versus where they were 12 months ago. We're happy to reiterate that expectation and plan to be EBITDA positive year one, free cash flow positive year three. In terms of the net net impact, the integration of Ilva versus the sale of the remedy assets, to be honest, I think that's going to be a wash. The EBITDA that we gain in year one from Ilva should offset the EBITDA that we are selling through the remedy asset package.
Great. Thank you very much.
Great. We'll move to next question, please, from Sida at Bank of America.
Thanks very much. Follow-up questions on Ilva, please. Can you talk about the quantity of shipments that you're divesting in Galati and Ostrava and compare that to the current shipments at Ilva? Also talk about the upside to Ilva's shipments over 2019 and 2021. Can you also just follow up on where we are with the remedy assets outside of those that have been agreed to be sold to Liberty House? How is that process shaping up? Thanks.
Yeah. I think in terms of the shipments from the assets that we're selling, based on the 2017, it's a very similar number. The shipments from the remedy assets are very similar to the performance of Ilva. Obviously, I just noted in the previous question that the performance of Ilva, we believe, has deteriorated over the past 12 months. That's something that we will need to address and will need to improve upon. That's a major part of our undertaking and our ability to turn around and improve that business. What we outlined in terms of our shipment plan is obviously a near-term plan to ship 6 million tons from Ilva, and then gradually or not gradually, but once we've executed our environmental improvement CapEx plan, that will allow us to move to a higher level of production and shipments.
Once that plan is complete, then we'll be able to step up the production and shipments from Ilva towards eight, 8.5 million tons.
The other remedy assets, anything to say about that?
On the remaining asset sales, that's imminent. We're making good progress, I think, there on the sale of the remaining rolling assets in Luxembourg and Belgium.
Daniel, how do we think about the importance of those assets in the total remedy package? I mean, if you look at the last book value of the remedy assets, the impairment you've taken, book value is sort of $1.3 billion for the entire remedy asset group. Can we assume that the majority of that sits with the upstream assets at Ostrava and Galati?
Yeah, that's a good assumption, Sida.
Okay. Thank you.
Great. We'll move to the next question from Bastian at Deutsche Bank, please.
Yes. Good afternoon, gentlemen. I've got three questions. My first one is a quick one on NAFTA. If we look at your ASPs, they develop pretty much as they probably should have been in this market environment. If we look at costs on the other side, they have been up much more on a per ton basis. What has been driving this? Because it seems like this has been much more than what we could explain by just the lower fixed cost dilution, variable costs, and tariffs. My second question is on market dynamics. You've been obviously talking a little bit about this customer standoff, given the market dynamics and the falling prices in markets such as the U.S. Has this come to an end already, or do you continue to see the market being rather a little bit in the slow mode?
My last question is on just some product mix. Is there anything we have to keep in mind with regards to the fourth quarter? Thank you.
Bastian, in terms of your question on NAFTA, basically, if you look at the profitability evolution quarter-on-quarter, you will see that it's really volumes and offset by higher pricing. That's basically in a nutshell. Plus, of course, the impact of Section 232 that we discussed. That basically briefs your results. We talked a little bit about the weakness in Mexico also impact primarily our long business in Mexico. That is also a component there. That's basically what we see. In terms of prices, yeah, I think, as I'm sure you are aware, most of the players announced price increase. Based on what we can see, we feel that those are sticking.
Okay. Thank you. Then on product mix, please.
In terms of product mix, there is nothing, other than maybe what we need to factor in in Brazil in quarter four, is that traditionally, given the seasonality, you have higher exports traditionally. That is something that I would highlight to you.
Okay. Thank you.
Great. Thanks, Bastian. We'll take the next question, please, from Rokas at Kepler.
Yes, hi. Thanks for taking the question. Can you elaborate on the cash needs for 2018? When I look at the run rate of your CapEx and of your cash taxes, you're actually well below that guidance you have given before. Shall we expect a certain shortfall in this original plan, or is there a massive rise on both sides? The second question is on this Argentinian thing. You have done this inflation accounting rather than proper asset impairment. Maybe can you explain why this is not being done through an asset impairment? Thirdly, for the working capital release in the fourth quarter, you have given quite a big range between $1.3 billion and $1.8 billion. As we are now already in November, what are the main elements for creating that uncertainty for the rest of the year?
Okay, Rokas. In terms of the cash needs, we are, as you can see in our Q&A, we are reconfirming the $5.8 billion. Yeah, you're right. CapEx, traditionally, we have a larger chunk of our CapEx coming in quarter four, we feel comfortable with the guidance with the $5.8 billion. In terms of Argentina, impairments and hyperinflation, these are two separate things. The fact that you apply hyperinflation, it doesn't mean that you have to impair your assets. That will be done, the exercise, the impairment review will be done as we always do in quarter four, but one thing has no correlation with the other. In terms of WCR, the key driver is really, as we see every year, the fact that we have the release in quarter four, it's part of the seasonality of our working capital.
The key drivers will be a reduction of metal stock that, as you have seen in quarter three, we built inventory. In quarter four, we have a release as we improve shipments. Traditionally in December, because of the holiday season, you ship less compared to where you were in end of September. Those, I would say, are the main drivers for the working capital release. It's a reduction in metal stock, and it's a reduction in volumes for the last, let's say, 15 days of December vis-à-vis September. The range, as I hope you appreciate, there are so many elements here that it's very hard to be precise. That's why the range.
Okay. Maybe one brief follow-up on Essar. What is the residual legal risk you're seeing that deal is not materializing at all?
Yeah. Thanks, Rokas, for the question on this topic, because I think it's important that it gets asked. From our perspective, we've had a very positive development in the recent weeks, the news that we've been selected by the committee of creditors as the winning bidder for Essar. We now move to the final stage of the process, which is having our resolution plan approved by the NCLT. Throughout the process that's been laid out, we've followed that process. There was a Supreme Court ruling, which we followed. We expect the process to continue to follow the clear terms of the IBC. Next step, NCLT approval. That's the final step, hopefully by year-end. Really, we don't see any legal grounds on which the committee of creditors' decision could be challenged.
Okay. That's very good.
Great. Thanks, Rokas. We'll move to next question, please, from Carsten at UBS.
Thank you very much. Three questions from my side. The first one is on your outlook, which is comparably constructive to what we have seen across the board in the third quarter. Could you elaborate, what is the driver of this constructiveness? As the market seems to worry at least about the price direction and the earnings direction. Second question is on the net working capital. The higher net working capital seems to be mainly in NAFTA and ACIS. Could you tell us what caused the buildup other than the higher U.S. steel prices? Were there any other elements, especially in ACIS, which caused the rise in net working capital? And is that being reversed in the fourth quarter? Thank you.
Great. Thanks, Carsten. Before Genuino comes back to you on working capital, I'll talk about the outlook. The reality is that business conditions remain favorable. Demand is growing. Utilization rates are high, and high utilization rates are supporting healthy steel spreads, and that continues. If you look at the indicators, they're continuing to support an outlook for positive demand growth. Yes, the PMI readings on an aggregate basis have come off the high levels that they were in Q1 and Q2. But they're still comfortably above the 50 level, telling you that demand continues to expand. I think if you look more broadly, the economic indicators and forecasts for 2019 are also suggesting growth. For what it's worth, the World Steel Association came out with their forecasts in the past couple of weeks, and they're forecasting growth in all of our core markets.
Obviously we will be detailing our growth forecasts for 2019 at the time of our full year results, but so far the WSA have put their numbers out. I think hopefully that gives you some context around the outlook for the business, but happy to go into it in more detail if you would like.
Thank you. Maybe just on the U.S. market, because you stated in your press release that you have seen a weak U.S. market, which, given where we are price-wise, was a bit of an interesting comment. Is that weakness with regard to demand, or is it just weakness because of inventory relief in that market?
Yeah, I think you're absolutely right. It's a contrast really between apparent demand and the robust underlying demand. We can all see the robustness of the U.S. economy, the strong GDP print for the third quarter. The real underlying demand indicators are very positive. What happened during the third quarter is obviously steel pricing started to come down, and when steel pricing comes down in the U.S. market, where possible, buyers will sit on their hands. They'll step to the side and allow the price to drop. They'll reduce their inventories and look to come in at a lower price point and replenish their inventories then. What we said in a previous question Genuino addressed was, we increased our prices just a couple of weeks ago, and transaction prices in the U.S. market have moved up.
That should be a positive signal for you there.
Okay, thank you.
Carsten, on your questions on working capital, maybe if I can start with CIS. You're absolutely right. What happened in CIS this quarter was that we increased our production, which is good news. As you know, we faced operational issues in Kryvyi Rih during first and second quarter. During those quarters, we were selling also from inventories. As we recover from those operational issues in quarter three and we increased production, as you can see, by about 15% in CIS, we were forced to replenish our inventory levels. What it means is, as we move now into Q4 and we don't need to replenish inventories anymore and our production remain at normalized levels, we're going to be able to ship much more. That's why we are guiding for higher shipments in CIS in quarter four.
Okay. Thank you very much.
Great. Thanks, Carsten. We'll move on to the next question, please, from Rick at Eggklam.
Hi, gentlemen. A couple of follow-ups, if I may. You mentioned the potential approval of a new concentrator in Liberia. Would it be possible to have a ballpark quantitative guidance as to what kind of CapEx we are talking here? That would be my first question. Second question, could you confirm that Uttam Galva will be included in the JV? What are the kind of synergies, if you can discuss these, that you are targeting by including these assets in the JV? Last, but not least, maybe, you were also referred as bidding for EPC construction, which is related to Essar to some extent. What can you say about this? Thank you.
Great. Just addressing the Essar question first. I think it should be clear that the intention is that the investment in Uttam Galva will be a part of the joint venture, and funded by the joint venture. Hopefully that's clear. The second point around ESP, et cetera, this headline came out earlier this week. We chose not to comment then, I think it's inappropriate to comment today on any market speculation in India or in any other markets. The reality, I think, is that with the $1.1 billion of funding that we are putting into the joint venture, it's going to be a very well-financed business. With all of the capacity and capability to do what it needs to do strategically and CapEx-wise to realize the potential of the joint venture.
Look, let me just complement on the synergies between UG and Essar. UG is basically a downstream business, so it fits very well in the overall footprint in Essar and UG. Essar has more HRC capacity, so that we're going to be able to roll in UG. We believe that there is an important synergy to be captured once we can have the two business together. In terms of the concentrator, I think we are at a very early stage, so we are still going through the engineering phase. It would not be the right moment to talk about or to try to quantify amounts. I think this will come as part of our next quarter review.
Thank you.
Maybe, Rick, just to highlight a couple of points, though, that we already have a lot of capital equipment on the ground. We have effectively a half-built concentrator, so a lot of capital equipment sitting in boxes. We obviously also have the infrastructure, which is already there to handle more volumes from Liberia. If you were to think about the CapEx intensity of a potential growth of our capacity in Liberia, it is low. We're considering a low CapEx intensity, a brownfield expansion of our Liberia capacity to produce what would we hope be a very high-quality product. Hopefully that gives you some more context to how we're thinking about that potential investment decision, assuming that the feasibility study comes back positive.
Thanks. Thank you.
Great. Thanks, Rick. We'll move to Francisco at Banco Sabadell.
Yes, hello. Good afternoon. I have three questions, please. First one would be regarding working capital. We've already discussed about inventories, but I can also see an important decrease in your trade payables. I don't know if that's something that you would like to comment about. The second one would be on your costs in ACIS, which have had a very good performance this quarter, and I would like if you can give us some more color on that issue and if it's something we should see also in the next few quarters. The last one would be regarding Europe and Brazil. If you could comment a little bit on what are your expectations going into Q4 and 2019. Thank you.
Yeah, Francisco, on your first question, working capital, you're right. We see a reduction in payables. This is just a function that once you increase your metal stock, part of your payables, they get automatically reduced because it's an increase of your metal stock and not raw materials and things like that. Here what we see is with an increase of metal stock. In terms of CIS, one of the two drivers I would mention this quarter, one, of course, is the stable operations in Ukraine. That helps, of course, from a cost point of view. Second, the effects. We had a significant devaluations in most of CIS countries. If you look at the rand, was 12% depreciation, the ruble.
All the currencies depreciate, which, of course, then help these businesses to the extent that they are competing in the export markets. That is a positive. In terms of Europe and Brazil, I think we already talked a lot about the trends for quarter four. We talked about how we see shipments evolving. You have already a good handle, I'm sure, on costs and prices. I think you have all the elements you need to come up with your forecast.
Okay. Thank you.
Great. Thanks, Francisco. We'll move to Phil at KeyBank, please.
Thanks so much. Daniel, I know it was talked about a couple of times in terms of the specific weakness that you called out in the United States in the third quarter. Was this perhaps buyer strike phenomenon specific to your automotive customers, or was it broad-based? I know auto's a big part of your book.
No, it's a more broad-based comment. It's not industry specific.
It's nothing more than commentary just related to your volume? There's nothing related to pricing or spreads that you're making here?
The reality is that we had those two effects. Pricing was declining, and our order book shortened because in a falling price environment, you effectively have, whether you want to call it a buyer strike or a short-term destock, you have this sort of temporary phenomenon where the volumes in the market come down considerably. That is what we experienced as we went through the third quarter. It impacted our results. As I say, given the positive underlying real trends for demand, we see it as a temporary phenomenon rather than something that we are more concerned by.
Just a second question, if I may. In terms of what your sense is on the Chinese steel markets moving into the fourth quarter. I know that there's some being written about them throttling back production in some regions for environmental and seasonal reasons. Some others that are counter to that view. Just curious in terms of what you all see, because I know you have operations there and obviously compete against them across the world. Thanks.
Fundamentally, I think the indicators are positive. If you look at where utilization rates are, if you look at where production rates are in China, cross-reference that with the very low levels of inventory, the year-on-year reduction in exports, and the fact that pricing in that market is still very healthy, in particular for rebar where the spreads are still very healthy, indicates that the underlying conditions in the Chinese market are still very healthy. It is the 1st of November today, it is the first day of the winter shutdowns. You're now going to have an enforced sort of constraint on production pretty much across the industry. It's a more targeted, more nuanced approach than we had 12 months ago. It is a broader program.
Although some companies will have a more limited impact because they've been able to improve their environmental performance over the past 12 months, which is the whole idea of that program. There will be some exclusions because it's a broader plan. The impact we feel on capacity and production will be very similar to what it was 12 months ago, through last winter. Yes, we should expect to see that come through in the production stats in the coming weeks and months.
Thanks, Daniel. Cheers.
Cheers. Thanks, Phil. We will move to the last question from Christian at SocGen.
Yes. Thank you very much. I missed the first 10 minutes, if I repeat a question you already asked, I apologize. I only have three of them, and they're quite short. The first one is on your CapEx for Q. I know you've mentioned it, and it's always the fourth quarter which is at the highest level. Over 40% of your annual CapEx is coming in that last quarter. My question is whether it's an accounting thing or whether there is some potential diEssaruptive CapEx taking place in the quarter, and if so, where that may be. The second question is on the hyperinflation accounting in Brazil. For the first time, we get a negative amount. If we multiply the average price you provide with the shipments, we get more than your turnover.
The question here is simply, should we expect a potential negative impact in the fourth quarter because of this accounting, or whether that's irrelevant? The last thing is on your European costs, which for the third quarter in a row, we seem to be much higher than we were last year over nine months. My question is, are the two higher costs in Europe, A, ETS and, B, Iron Ore? Am I right in thinking these are the highest costs year-on-year? Thank you.
Christian, on CapEx, I think if you look back year-on-year, you will see that Q4 traditionally is the quarter where we have the highest spend. This is just how it works. You have your budget cycles happening now, actually. The projects get approved. Then they go out and start placing the orders. Takes time for you to start to see the materials being delivered to you. We are comfortable with the guidance. We have reconfirmed our cash needs, which includes CapEx. Of course, at the end of the year, you can always be a little bit higher or lower, but fundamentally, the cash needs of the business remain what we have guided at the beginning of the year. The hyperinflation, we talked about it. I think this is a new phenomenon. This is in Argentina.
That's the first time that hyperinflation accounting is being applied, and it's just a fact as a result of Argentina now inflation over the last three years reaching 100%. That's a negative development, of course, for the country, and we have to reflect that in our books. Going forward, going to Q4, we also discussed that the impact should not be as extreme because it's really a function of how the peso moves, the effects, and the indexation that is used to update your financials in Argentinian pesos. In terms of European costs, that you also asked. This quarter in particular, we had the translation impact that I can quantify it for you so that it's about $30 million impact in our costs this quarter.
Thank you very much
yeah.
Great. Thanks very much, Christian. That does bring today's call to an end. Thank you very much for your interest and attention. I think we did get through everybody's questions today, but if there are any further questions, then please do reach out to me, either by phone or email, and we will look forward to seeing many of you in the coming days and weeks. Thanks very much.