Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's OCI N.V. Third Quarter 2017 Trading Update conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press dial one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, Tuesday, the 21st of November 2017. I would now like to hand the conference over to your speaker today, Hans Zayed. Please go ahead.
Yes. Thank you, and good afternoon and good morning to our audience in the U.S. Thank you for joining us on the OCI N.V. Third Quarter 2017 Trading Update conference call. With me today are Nassef Sawiris, our Chief Executive Officer, and Hassan Badrawi, our Group Chief Financial Officer. This morning, OCI N.V. reported its third quarter 2017 trading update. Please also note that our subsidiary, OCI Partners, reported its third quarter results on the 6th of November, and you can find the details of these results on their website. On this call, we will first review OCI's key.
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Apology for the technical issues.
Thank you, and our apologies for the disturbance, the line dropped. As I was saying, we will first review OCI's key operational events and financial highlights for the quarter, followed by a discussion of the current market environment and outlook. At the end of the call, we will also host a question and answer session. As a reminder, statements made on today's call contain forward-looking information. These statements are based on certain assumptions and involve certain risks and uncertainties, therefore, I would like to refer you to the disclaimers about forward-looking statements in today's press release. Let me introduce our Group Chief Financial Officer, Hassan Badrawi.
Thank you, Hans, and thank you all for joining us. As Hans indicated, we posted this morning our trading update for the third quarter, which provides information on volume developments, which we categorize by product group. We also give some directional indicators for some of our key financial metrics, which I will briefly cover. Let me first start by highlighting some notable milestones this quarter. Firstly, we have successfully ramped up our state-of-the-art fertilizer facility in Iowa, IFCO, to exceed design capacity during September. We hope to demonstrate further positive performance in the ensuing quarters as we have achieved higher operational stability. As mentioned in our previous calls, this complex plant with a diversified product base and capability to optimize the product mix on a daily basis has increased OCI's global production capacity footprint by 30%.
Secondly, our EBIC ammonia plant in Egypt has ramped up utilization running at north of 90% after regaining access to our export jetty and resuming exports in July 2017. We expect that we will be able to achieve our 100% capacity utilization run rate after a plant turnaround in 2018. The combined impact of IFCO's ramp-up and the resumption of our ammonia production in Egypt has helped drive our sales volumes up 29% to a record 2 million tons during the third quarter. This is of course despite a continued shutdown for maintenance and repair work on one of the ammonia production lines in Algeria, which is on track to restart in December. Overall, this represents a 19% increase in sales volumes over the second quarter of 2017. Drilling down to our operational groups, starting with the fertilizer segment.
Let me give you some highlights specific to that segment as well. Our group ammonia volumes increased by 8% in the third quarter compared to the third quarter last year, boosted by the ramp-up in Iowa and Egypt, but offset, as I indicated earlier, by the continued shutdown of one of the ammonia lines in Sorfert. We expect the line, as I said earlier, to restart in December. This shutdown should be covered by insurance for business interruption and will be appropriately reflected in our financial statements in due course. Urea volumes have increased also 53% in the third quarter of 2017, mainly capturing growth in outputs out of our Egypt and Algeria. This compares to what was a low quarter last year, as you may recall. During the third quarter 2016, we also had some outages in Sorfert, urea for what was a planned maintenance.
Also last year, EFC Egypt was still affected by some natural gas curtailments and was at the time running at about 80% utilization rates. As you can see from our recent presentations in various investor conferences and recent conference calls, we highlight that these natural gas issues have been resolved due to the major gas finds by the likes of Eni and BP that are now flooding the system. It's worth noting that EFC also had a planned maintenance turnaround in July and August of this year, which we believe was duly timed to coincide with seasonality. Since that turnaround, EFC has been running at 100% utilization, but for the third quarter, on average, it was at just below 90%, reflecting that turnaround. In terms of our nitrates business, we've witnessed an increase of 39% during the third quarter compared to the same quarter last year.
These volumes were boosted by, again, the ramp-up of UAN volumes from IFCO and were supported by our steady CAN business in Europe. Looking at the industrial chemicals business, which includes our methanol and melamine, both segments have performed well during the quarter. Our methanol volumes have improved up 11% due to healthy capacity utilization OCI Beaumont in the U.S. and strong increase in sales volumes at BioMCN in the Netherlands. Following repairs to the methanol units in May 2017, OCI Beaumont has been running consistently at rates above nameplate capacity, except for a few days of shutdown during the recent storms in Texas, and on average at higher levels than before the shutdown, which took place in the second quarter. Melamine sales volumes in the third quarter were the same level as last year. Briefly, some comments on the financial performance.
As I mentioned earlier, that this is a trading statement, does not include detailed financials. My comments will be fairly limited to some directional indications on revenue, EBITDA, and net debt. Our consolidated third quarter 2017 revenue was higher than the same period last year, driven by record production and sales volumes and notably higher prices for our industrial chemicals segment. Please note that from an accounting perspective, and it's mentioned in the press release as well, IFCO's assets were not yet placed into service during the third quarter as the Austrian ammonia plant had not reached design capacity until September. As a result, revenue recognition and depreciation had not started in the third quarter, but we currently expect that this will take place from the fourth quarter of 2017 and onwards.
Both reported and adjusted EBITDA were also higher than the same period last year, despite higher natural gas costs in Europe this year. Just to comment on net debt, our net debt was just over $4.4 billion as at 30 September 2017. This is a slight increase compared to net debt as mid-year, reflecting 3.5% increase in the euro-dollar exchange rate, which resulted in a EUR 50 million increase in euro-based debt. It is worth noting that gross debt decreased by 1%, hovering at $4.7 billion. Also worth noting that around $730 million of our consolidated net debt is in our Algerian dinar, which is affecting our debt at Sorfert. We comment, we'd like to note that we've seen some currency movement there, with the Algerian dinar devaluing by about 6% since June.
Obviously, any further movement or any further devaluation would have a positive impact on our dollar translation at a consolidated level. We remain very focused on de-leveraging, supported by a significant step-up in our capacity, and focused on managing our CapEx going forward in an intelligent way. One of our areas of strategic focus going forward, we'll also be looking at reducing our overall cost of debt throughout the system opportunistically as our free cash flow is beginning to reflect what we believe should be closer to our run rate in 2018. I'd like to introduce now Nassef, who will provide some further insight on our relevant markets and some additional comments on overall business strategy.
Thank you, Hassan. First of all, I'd like to start by saying that we're quite pleased with the performance of the Iowa Fertilizer plant, which contributed to our record volumes during the third quarter. The ammonia plant has exceeded nameplate capacity during the month of September and has achieved levels close to 110% since then. The downstream units, UAN and DAP, have also exceeded design capacity by even higher rates. The plant is designed so that we can switch between multiple products at short notice and opportunistically increase and maximize our netbacks. The addition of this facility gives us a strategic foothold in the U.S. Midwest market, close to our end customers, diversifies our production footprint, and increases our production capabilities by 30%. Iowa is also one of the most efficient plants globally, and its KPIs are already demonstrating very low gas consumption of gas per ton produced.
With the ramp-up of our production in Iowa and in Egypt and the expected restart of Algeria in December, we expect all our consolidated plants to operate at run-rate capacity in 2018. We also expect to ramp up our methanol capacity over the coming 12 months. Recommissioning activities are underway for Natgasoline , a 1.8 million metric ton methanol facility in Texas, and initial commissioning of major subsystems has already started. We expect first production in March 2018. We are progressing well with the methanol capacity expansion of BioMCN in the Netherlands. By taking the second line out of the mothballs, we are expecting to commission the project in the fourth quarter next year. Including OCI's proportionate share in Natgasoline , the expansion of BioMCN, OCI Beaumont, our methanol group's capacity will reach 2.8 million metric tons by end of 2018, compared to 1.4 million tons currently.
As you can see, our portfolio is becoming also increasingly diversified and capable of weathering tough conditions, which brings me to the next topic, performance of our end markets. nitrogen markets have once again gone through a period of extreme volatility. We believe that parts of these price swings can be explained by the way the industry is structured. Therefore, during the third quarter, we have reassessed our global sales and marketing efforts and have taken a number of measures. Most importantly, we have taken a group-wide strategic decision to limit both the quantity of forward contracted sales and the company's participation in the annual fill season selling program in North America. We believe that this could help to create a more stable environment for nitrogen fertilizer prices, and as a result, serve our customers better. Fertilizer markets have turned markedly more positive since our last conference call in September.
Despite some recent corrections at the time, urea prices had partially recovered, but the biggest increase were late in the quarter. By the end of September, prices had increased by almost $100 per metric ton since the lows witnessed in June, reaching a level of around $300 per ton then. The price increases have been driven by a combination of healthy demand, in particular from India, Latin America, and Russian domestic demand, low global inventories, and continued low level of exports from China. In the medium term, we continue to expect that the supply-demand balance is trending positively as we also show in our analysis in our investor presentations.
On the supply side, there are now only a few capacities starting up. We expect Chinese exports to continue operating at these low levels and not to increase beyond 3 million-4 million ton exports this year, and trending downwards thereafter. Operating rates in China have been below what some analysts consider design capacity. However, we strongly debate those actual capacities compared to what the plants have ever produced. Some of these design capacities are strictly nominal capacities that have never been achieved by the Chinese plants. The Chinese industry is behaving significantly more responsible, focused on cash flow generation, and limiting environmental pollution. The restrictions that are applied in that regard have started to bear fruit.
The industry is now operating at levels that are slightly achieving positive cash flows. Currently, the domestic market prices are higher than export prices, making another reason for Chinese producers to export less. The outlook for urea demand continues to be healthy, with a lot of good pockets of increased demand in emerging markets, and the industrial use of urea in the U.S. for DEF. Despite the recent cancellation of a tender in India and the delayed award of a tender in Ethiopia, those significant two demand pockets remain there. Merely the demand has been shifted back and will increase the pent-up demand and positively going into the beginning of next year. Brazil is on track to reach a record of almost 5 million tons of imports in 2017, which would be a 25% increase over 2016.
Demand is also healthy in other countries in Latin America, in Southeast Asia, and in East Africa. In Russia, planted acreage and exports of nitrogen in planted agricultural products, in particular wheat, is also increasing to record levels. Ammonia prices have been lagging urea throughout the third quarter and were down significantly, both compared to the third quarter last year and to second quarter this year. Since then the ammonia market has become more positive in the past few weeks and prices have started to move up, still well below economic levels for many producers. The increases in the ammonia price are a result of the rebound in downstream products, as well as higher gas prices in Europe.
On the industrial chemical side, our methanol business is benefiting from significantly higher prices, up 40% during the third quarter compared to a year ago. The outlook for the methanol markets remains robust, with strong demand growth in the U.S. and Asia, coupled with relatively limited new capacity addition, ensuring a healthy balance. Both traditional demand and methanol to olefin demand in China are very strong. Operating rates in the MTO sector have been increasing, and we expect the start-up of three new MTO units in the next 12 months to further contribute to a higher run rate of demand. Traditional demand for methanol in the U.S. has also increased and expected to remain strong in the near term, as markets are buoyed by increased demand for downstream products for the building materials sector.
We expect to benefit from this market environment through our existing operations in the U.S. and Netherlands, as well our two growth projects. Melamine prices have contributed well so far this year and continue to be on an upward path for the coming quarter and going into 2018, increasing for the second year in a row. European contract selling prices have gone up every quarter this year. The current quarterly European contract price is EUR 185 higher or 13% higher than at the end of 2016. Today, we announce a further price increase of EUR 60 per ton, which will be effective from the beginning of 2018. This business continues to be a healthy source of diversification for OCI's operations. Before we open lines for questions, I would like to highlight a few points.
Firstly, I would like to say that our centralized global commercial team has done an excellent job during difficult market conditions. Their efforts were central to achieving record volumes this quarter. Looking ahead, we expect our volume-driven growth to continue. We expect the full contribution from Iowa from the fourth quarter this year, better utilization of our assets going forward, in particular at EBIC, and the return of Sorfert to normalized run rate starting from December. In 2018, we will be ramping up our additional methanol capacity. We believe we are well-positioned to benefit from the upside in the fertilizer selling prices. Our locations are closer to our customers in Northern Europe and in the Midwest in the U.S., which should ensure higher netbacks compared to our peers. Our plants offer product arbitrage among multiple downstream products, which gives us the opportunity to maximize netbacks at various times.
We do have an efficient global integrated distribution platform that relies on our products as well as on outsourced trading opportunities. Based on all our plants ramping up to run rate going forward, any increase in selling price will flow to the bottom line. We estimate that a $20 per ton change across all our products will have an impact of approximately $100 million of EBITDA. Thank you. We are now open for questions.
Thank you, ladies and gentlemen. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. This will only take a few moments. If you wish to cancel your request, please press the hash key. Once again, please press star one if you wish to ask a question. The first question comes from the line of Tom Wrigglesworth . Please ask your question.
Good afternoon, gentlemen. Thank you very much for your presentations. Three questions, if I may. The first is, could you just give a little bit more detail as to what you mean by a full quarter of impact from the IFCO facility? Is that 80%-85% utilization rate across all products? Is that what we should be thinking there? Secondly, it's hard for us to see, but could you identify to us what the UAN price inland in the Midwest is today? The third question is, according to ICIS, there's been a number of reports about a potential outage in your Geleen facility. Could you just clarify what's happening there and any financial impact, if there is any? Thank you very much.
Okay. I'll start to comment on your first question. Full quarter, when you see some reports saying that UAN in September was 65%, it doesn't mean that the plant in September was not operating, but we are balancing multiple downstream products and all that. A full quarter, by definition, could be higher than 85%. We aspire for higher than 85%, because the plant on a regular day can produce above 100%. Even if you have 10% of outages, you can end up the quarter at close to 100%. I won't speculate on what happens. We still have another six weeks to go, and I don't want to jinx the production. As we speak, the production is, as I mentioned before, on a good day, can be more than 110% of all ammonia and downstream products.
This plant can produce more than its actual capacity in downstream products, and we can actually purchase and have purchased occasionally ammonia to manufacture it into downstream products and produce even higher cash flow as a result of going downstream with purchased ammonia on top of our ammonia that we manufacture currently at a rate of 110% of the nameplate. On the UAN price in the Midwest, it reflects a reasonable premium over the published NOLA price. I'm not sure exactly what it is right now, but last time I checked, it was over $170 in the Midwest and a bit lower, obviously, on the NOLA price.
Concerning the Geleen outage, the outage was in one of our ammonia plants. It shouldn't affect dramatically the results because at $6 gas, you are producing ammonia at around $200 plus, and we purchased ammonia in the market at slightly higher than what the production cost is. In a way, we're not going to shed any tears when ammonia is not in full production in Europe with gas right now at $6 and the market for ammonia being at such ridiculously low price levels. The downstream production continues, and that's where most of the margin is captured when ammonia prices are this low. I hope that was the answer on Geleen. It's one of the two ammonia lines, which produces about 40,000 tons a month.
I think all in all, that plant will be out for four to six weeks and should be back in production within two weeks.
You can meet all your downstream commitments.
Yeah
in Geleen. Okay.
Actually, I think we are benefiting this year from the start of our strategy of not selling more than 30 to 60 days forward of any commodity that we produce or any product that we produce. This strategy serves our own stakeholders right. Even the customers in 2008, when they bought urea for $1,000, they had to suffer when urea prices went down during the application season by more than 60%. It can go both ways, we do not believe that selling to traders and stockists in the low part of the season, so that they become our competitors when demand arises, is a smart thing to do. We are happy that some traders have lost money and decided that they will not follow this policy in the coming months because the arbitrage between the paper market and the physical market is highly manipulated in this industry.
The paper market is so thinly traded that with one or two barges in New Orleans in the paper market, you create a fictitious price for a $600,000 purchase of a barge that benefits trading companies that can do something and import from Gulf producers at a formula that is linked to a very thinly traded one barge of $1,500 price in NOLA. Yet the producers in the Arab Gulf lose a lot of money when they export to these traders at a formula price that they can manipulate with movements in the NOLA thinly traded paper or spot market. We are starting by ourselves, putting some discipline to make sure that full transparency and selling to customers and users and not speculators.
Okay. Understood. Thank you very much.
The next question comes from the line of Christian Faitz. Please ask your question.
Yes. Good afternoon, gentlemen. Three questions, if I may. First of all, the Natgasoline ramp by March. When do you expect the plant to be fully ramped? Second of all, can you share with us some insights into the most recent tender in India? What are your thoughts on that? Can you also share with us the timing of the mentioned EBIC plant turnaround? Thank you.
First of all, your first question. Pre-commissioning has started. We expect to start production in March. Obviously, during the commissioning, that is the plan. During commissioning you could have a few hiccups that could make that date slip. These are provisional dates. Construction is above 90-some% complete, and that last 10% is mostly pre-commissioning and commissioning and minor insulation works remaining. Obviously the hurricane in Texas had a toll on the schedule. We lost close to 4 to 6 weeks until we reached back full construction manpower on site. We are fairly confident that the March date should be close to where we start producing methanol at good capacity. Methanol plants are a much simpler process than a fertilizer plant. You can think of it as one third of Iowa Fertilizer Company in terms of the size of the mechanical equipment there.
Your question on the Indian tender, we have taken the decision not to participate in the Indian tenders for the last 3 years. A lot of times, the rationale for canceling a tender has put some sellers into difficult situations because they keep products for the tender, then the tender gets canceled. I think long term, I'm not sure that this will serve the buyers right by adopting these strategies. However, we didn't participate in any Indian tender in the last 3 years and do not intend to do so in the foreseeable future. On EBIC, the turnaround will probably be done in the summer. In general, for 2018, we are trying to focus most of our maintenance activities in the summer.
Thank you very much.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from the line of Frank Klassen. Please ask your question.
Yes. Good afternoon, Frank Klassen, Degroof Petercam. A question on Sorfert. What exactly caused the disruption, and when do you expect the insurance payments to come in? Do you still expect them to come in at 2017? Secondly, looking at your balance sheet, while net debt is still moving up, there's a convertible coming up for refinancing. Could you just say anything about how you're looking at your balance sheet currently, and what are your refinancing opportunities? Thank you.
The one piece of equipment that should not fail have failed, and hence the business interruption insurance claim, which has been filed. The exact timing of the payment, whether it happens in the coming few weeks or there is a partial payment in the coming few weeks, is not yet definite. As soon as that happens, probably you will hear more about it with the year-end results. The claim has been filed, and it's a standard business interruption claim for a piece of equipment that should not have failed. Sorry, what was the other part of your question?
Yeah, that's more on your balance sheet.
The balance sheet, obviously, to simplify matters, the third quarter, we had witnessed urea prices close to $200 and ammonia prices not far from that level also. These are prices that very few producers would generate cash flow. We did generate cash flow, but we still continue to dribble on our previous commitments on CapEx plans. In terms of de-leveraging at current pricing and with our current footprint, we expect de-leveraging to have started in the fourth quarter and to continue to accelerate in 2018. To give you an idea, if prices move up by $60 or $70 across all our products, we would be at below two times net debt to EBITDA within a few quarters of operating at these levels, which still would be lower than mid-cycle.
Okay. Thank you very much.
Once again, if you wish to ask a question, please press star one and wait for your name to be announced. The next question comes from the line of Tom Wrigglesworth. Please ask your question.
Thanks, everybody. Sorry, there doesn't seem to be much of a queue. I thought I'd come back with a few more that I've got on my list. Firstly, you mentioned that Brazil demand had been very strong in the nitrogen market, in the year to date. Is it reasonable to assume that this has been a step up in Brazilian demand, and we should look at these high level of imports from Brazil going forwards, and what gives you confidence in your view? Secondly, Hassan, you talked about potentially lowering your average cost of debt. Could you give us some kind of sensitivity as to how much of the debt can be quickly addressed? I mean, whatever quickly is, maybe over the next 12 months, assuming cash flow generation and de-leveraging occurs. Thank you.
On Brazil, I think the strong demand is probably here to stay and to grow further. The ag sector is one of the few bright spots in the Brazilian economy. The operators there and the exporters and the soybean crushing, ethanol, all the activities in the Brazilian ag sector have been spared of a lot of the problems that the Brazilian economic and political situation have suffered. Given the fact that there is no capacity either planned or forthcoming soon in Brazil, and they're not strong natural gas producer, you can forecast that in the next five years, the demand and imports can only go one way because there is no domestic supply appearing in the horizon. The fundamentals for Brazilian agriculture continue to be strong with the huge, untapped area of the land and redundant water supplies. That is for Brazil.
The cost of debt, we obviously are at the last part of our CapEx program, which with most of the CapEx, with the exception of BioMCN, fully funded for now. It is normal that as the cash flow starts to improve, that all our ratios are improving and we are already in advanced discussions about several of the pockets of refinancing. It's not just about the cost of funding, about the allocation of debt and the currency of the debt and the most efficient from a tax perspective as well. It's a whole revamp of our various debts and with one theme that the number one target is to lower the cost of debt. I think that within six months, you will see the first signs of that effort bearing fruit.
Okay. Thank you very much.
The next question comes from the line of Rohan Shah. Please ask your question.
Yes. Hi, good afternoon. This is Ahmad from Deutsche Bank. Nassef, hi. I just wanted to know if you are looking to refinance actually your debt next year. What actually your target assumption in terms of net debt to EBITDA? It's perhaps a question for Hassan. The second thing on Algeria, correct me if I'm wrong, but since you have been running this plant actually, there were some couple of shutdowns. I just wanted to understand if there are some specific technical issues on this plant, and what can explain the different shutdowns that we had in Algeria?
I'll start by answering the Algerian. The shutdown right now is in a different plant. We have two plants in Algeria, two ammonia plants and one urea plant. There has been a shutdown in one ammonia plant in one area. It was unfortunate that the spare part was a long lead item. It's a EUR 1 million waste heat boiler, it took a long time to get that piece of equipment into. The other plant, a failure of a piece of equipment that shouldn't have happened and hence the claim from the insurance. In general, the plants are state-of-the-art plants. They are performing on the normal metrics. We did have issues of spare parts availability. Those spare parts availability is unfortunately a bit late, by the time we followed the procedures of imports of the spare parts.
We are looking that situation is in a much better situation now by the end of 2018, with most of the spare parts being on site, that we are very optimistic about 2018 being a good production year in Algeria. On the net debt to EBITDA, the key question is at what price level the commodity is. We think that today if we are at mid-cycle prices, our net debt to EBITDA would have been two times net debt to EBITDA today with our current capacity. You have to find a reasonable balance in a cyclical industry of where you want to be on leverage at trough pricing. I think at trough pricing, being in the three to four times net debt to EBITDA, then have the price to be deleveraging occasionally. This is a level I think that is acceptable for us.
Our stated target of reaching investment grade is still a target. It might not happen as fast as we can. As I mentioned before, if prices recover as we expect them to do sometime in 2018, your ratios will recover as a function of rising EBITDA.
Thank you very much.
There are no further questions at the moment, but if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from the line of Daniel Ching. Please ask your question.
Hi, guys. I was just wondering about the methanol assets in the context of your portfolio. Is there any strategic potential to spin off those assets next year? How do you guys think about those assets in general?
Currently, we are focused on the key initiatives of the capacity ramp-up in methanol. We like the methanol space. This is a product where demand has grown between six and a half and 7% consistently for the last 10 years. It serves well within the portfolio to balance. Having multiple products serves well, in terms of balancing our cash flows. Just like melamine, which has been doing fantastically well in the last two years, methanol has served at times when, during the summer, methanol prices were going up, while urea and ammonia prices were coming down. It serves a good purpose as part of our portfolio. We don't comment and will not comment on M&A, or too much strategy in terms of doing strategic deals on M&A or assets.
Our short-term priority right now is the significant ramp-up of the methanol capacity, which I think will be behind us within six to nine months.
Got it. Then just as a follow-up to that question, can you talk a little bit about the refinancing at the OCI Beaumont plant and what the structure of that refinancing might look like on the term loan?
We will not go into specifics about one of the subsidiaries refinancing. We're looking more on a holistic view, that is multiple assets refinancing, including our corporate cash. The only thing to report is that as our CapEx plan is now providing visibility of where the cash flows are going to go, we are in a very good, well-positioned to refinance and extend maturities. The priority again, is cost reduction on our interest. This year, we will have close to $270 million of interest expense. That is way too high, and we think that there is lots of opportunity to optimize that.
Perfect. Congratulations on the update.
Thank you.
There are no further questions at this time. If you wish to ask a question, please press star one and wait for your name to be announced.
Okay. Thank you everybody for joining us and looking forward to our next call.
Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.