Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Banco BPM Q1 2019 Results Presentation. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask At this time, I would like to turn the conference over to Mr.
Roberto Pernagio, IR Manager of Banco BPM. Please go ahead, sir.
Thank you very much everybody to be with us for the presentation of the Q1 results 2019 of Banco BPM Group. As usual before leaving the field, Giuseppe Castagna, our CEO for the presentation, let me remind that the Q and A section is reserved only to the financial analysts and you can find the presentation on our website on the Investor Relations page. Now I'll hand over to Mr. Castagna. Thank you.
Good evening, everybody. This is Giuseppe Castagna speaking. Thanks for being with us for the Q1 results. Let me say that Basically, we can say that with this balance sheet, we have basically reached most of the target that we had in mind when we started this merger. I would say that we have completed A dramatic reduction of NPE reaching a very satisfying ratio below 10%.
We have built up a solid capital position growing quarter on quarter. We are building a balance sheet which is growing in volume both in asset and in liabilities, especially in loans and current accounts. And also we were able to reach A good profitability in this Q1 in line, I would say, with the expectation and consensus. Call. Notwithstanding a slow start in commercial activities, but thanks to good cost control and lower provision.
Starting from the risking on Page 7, here we have only the last year reduction. In terms of NPE ratios, we went down from 20% to 9.9% including the Lease AEC in transaction that we have concluded during the Q1. On the better loan ratio, it's even better. We started from 13%, we are now to 3.1%, only 1.4% net. And OTP without any specific disposal, but only with workout was we were able to reduce from 7.5% to 6% gross and 4.6% net.
The tax asset ratio went down to 71%. The capital position is increasing. Also this quarter, we have experienced a growth of 30 basis points In our pro form a fully loaded, as you know, we are still waiting for some accounting related to the Agos transaction and the platform, but the comparison with 11.5 of last quarter is 11.8 this quarter, not withstanding 12 basis point reduction due to IFRS 16 accounting principle. Also the phasing ratio was up from 13.5 to 13.7. On Page 9, you can see Some highlights of the performance of the balance sheet in which we can see how the risk profile of the group as better during these 2 years, not only in terms of reduction of NP, but also again in loan growth, in current And deposit growth almost 6% in reduction of the Italian Novi portfolio 3,000,000,000 in 1 year and in a very strong liquidity position, which account now to total eligible securities for more than €53,000,000,000 As I said call.
Notwithstanding a lower start in terms of commercial activity, as you know, our bank has experienced some problem during the Q1 due to the many things happening in our bank. But notwithstanding that, We were able to cost reduction and finally reaching very Start to the cost of risk, we were able to target the €150,000,000 which were Our potential target for the Q1 in line with our budget and consensus. The $150,000,000 of course has to compare with the Q1 $223,000,000 But I have to remind that in the Q1 there was almost €180,000,000 related to the bank assurance strategy transaction. And inside the €150,000,000 there is a contribution of almost €6,000,000 from the Nexi transaction, but also a negative contribution to single resolution fund for €41,000,000 Let's go a bit more through the different items. Net interest income down.
We were expecting, of course, The reduction due especially to the PPA and IFRS nine, as you can see in the 1,000,000, once we got the final perimeter of the last ACE disposal, We can recalculate the difference for increasing from €160,000,000 to €185,000,000 Only in the Q1 there is a difference of more than €80,000,000 like for like, which reduced the difference between the quarter of 2018 and this quarter to 1.9%. In terms of Q on Q, We have a reduction of 5% if you exclude the calendar effect, we go down to 2.8 percent of difference. In terms of spread on Page 13, Finally, we can see a rebound in the spread. Thanks to keeping the asset spread to 1.9 and with a small reduction one basis point of the cost of funding. The real for us unsatisfactory results.
The results is net fees and commission, again, related also to peculiar situation of the bank that the bank experienced during the Q1 and also of course to market condition. I have to say that especially the 1st 2 months were particularly difficult for our commercial network. Starting from March, we are experiencing again results in line with our budget expectation. In April, we had More than $1,000,000,000 $1,000,000,000 $100,000,000 of sales, which is in line with our expectation. And also my is again on track for reaching what we feel could be the right result for us.
Just going through the different number, the reduction from the Q1 2018 is basically all in almost all in upfront fees for replacement of investment products. Meanwhile, compared to last quarter, the main difference rather than in management advisory is in credit. This is notwithstanding credit raised the issue of new loans to $5,000,000,000 compared to the $3,800,000,000 in the Q1 2018, but we experienced a Quite normal seasonable reduction of the structured finance and syndicated loans issue which were down from €1,700,000,000 over the last quarter, Quite normal such increase in the final part of the year compared to €900,000,000 in the Q1 of 2019. Let's say that this $190,000,000 has to be read also In the light of issuing of €500,000,000 of certificates which of course have not computed under net fees and commission that goes to net financial results And this would have brought the commission result to something more than $200,000,000 in the first quarter. On Page 15, net financial results.
As I said before, with the positive contribution of Nexi, which is the main aspect related to this item. Let's go to cost on Page 16. Operating cost very good. We are still keeping a good pace which we started since the beginning like for like is around 5% of reduction. The quarter on quarter comparison of course has to bear in mind that in the last quarter 2018, we have some extraordinary savings.
Personnel expenses are going down almost 4% year on year. Again, on the Q4 2018, we had some reversal of the Scheme registered for the entire 2018, but the pace is still very good. And notwithstanding, we are terminating the incentive scheme for retirement December 2018. We are still experiencing reduction in personnel. The headcount are going down since the beginning of the year, Almost 70 people bringing the total headcount to 22,175.
I remember that when we started we were almost In administrative expenses, there is the consequent reduction call. Both year on year and quarter on quarter. Of course, it's better to read the reduction in the Great bubble, 8.9 year on year at 6.3 quarter on quarter because the 21% Taking account also the new effect, the new adoption, new effect of the adoption of IFRS 16, which as you know account in a different way the leasing hold by the bank. And this is the difference is going into amortization and depreciation and is around 25,000,000. The effect of course the net effect is 0, but we have a $25,000,000 less of administrative expenses, dollars 25,000,000 more of amortization.
Let's go to cost of credit. Finally, we are reaching the normality, I would say we have seen a very consistent reduction not to comparable of course with the last years when we had all the forced disposal in order to get to the current NPL ratio. Finally, we reached 57 basis points, which is as you can see on Page 20 is supported by the 3 Key drivers that determine the reduction of cost of risk. First of all, of course, the big reduction in the stock Going down 52% from €25,000,000,000 to €11,000,000,000 after the project ace. The good decrease in default rate, which is going down the net inflows, The default rate is going down 1.2%, 36% year on year and the flow from UTP to bad loans, the danger rate lower 34% versus last year.
Let's talk about the balance sheet. As I mentioned before, Very big increase in current account site deposit, 8% year on year and 3.3% Q on Q, I have to say that we are still registering during April and beginning the May 5th increase in current account, which shows how the bank now as clients that want to be liquid and driving for protection and secure investment. This of course gives us some problem in terms again of building up commission, but I am sure that we can be able and already from April we started to convert part of these volumes of and current account into asset management. On Page 23, we don't have any more retail bond in the next 3 years. Meanwhile, only €2,000,000,000 for a year of starting from 2020 of institutional bond maturities, which is more or less equivalent to the issue we forecast to do in 2020 2021.
As I mentioned before, a very strong liquidity position we are growing quarter on quarter. We have reached now 54,000,000,000 of eligible securities, Wish and Encumbered Liquid Securities. We were almost EUR 22,000,000,000 in March, again in April, we have reached almost €27,000,000,000 of liquid security unencumbered. Of course, this brings to the TLTRO, we will be waiting as other banks in order to understand which will be terms and condition for the next TLTRO before deciding the new strategy on funding. Securities portfolio is not changing too much.
Basically, the small increase that you see on the Italian dollars is all related to trading activities, very short terms. The spread sensitivity is still $1,600,000 down again from $3,500,000 last year. The duration is 2.6 year versus 2.7th end of last year. The non Italian Novice Grew to €9,300,000,000 and HTCS reserve bettering of €130,000,000 having now a negative contribution of €60,000,000 On Page 26 is the effect I was talking before, not big growth, still not big growth In asset under management only 2.4 mainly to the market. We are Again, I've started already with also with the reorganization of our marketing and commercial Productivity, a new strategy on all the range of different products, bank assurance, asset under management, funds of funds and we are sure again that we can take profit of the growing of volumes in current account.
On Page 28, talking about loans. This is the global Loans performing and non performing, of course, we have the massive reduction on non performing. I was mentioning before, If we consider only performing loans, we are growing 5.3% year on year and 2.7% quarter on quarter. On Page 29, you can have a better understanding of this growth related to the core customer loans, Which also not considering the leasing in runoff, the GACs and the repos is growing 4.6% year on year and almost 2% quarter on quarter. As I was mentioning before, In the Q1 2019, we registered a record New granting, loan granting for €5,200,000,000 Going back to non performing exposure on Page 30, You can see on the upside of the slide, the reduction of the gross NPE.
We were already talking about that almost €13,500,000,000 of reduction in the last one year from March 18 to March 19. And also in terms of net NPE, we went down €5,000,000,000 from $11,300,000,000 to $6,400,000,000 On Page 31, you have I would say an interesting breakdown of our NPE portfolio, which I would say is completely different from the other Italian banking system being nowadays to compose for of bad loans, gross bad loans are only 31% of the total NPE and the net bad loans are only 23% of the net total NPE. So a very comfortable situation visavis an Italian average which is more or less 54%. In terms of secured and secured also in this respect, We have 64% of gross NPE exposure secured and 72% of gross of net NPE exposure secured much higher than the Italian average. This would is important also in light of understanding the coverage levels.
Of course, if you go through The single items, backlogs, COTP, we are still growing in coverage year on year. Of Of course, we are decreasing in the total coverage of MP because of this completely different composition, which now see The 3 quarter basically of the NPE composed by OTP. I would go directly to the capital on Page 35. As you can see, there is here you can find the capital composition. Basically, we started 10 call.
As stated, common equity Tier 1 fully loaded in December, which was 11.5 pro form a through the increase we went through to 10.9 without the IFRS 6 became 10.8% to which we are still to add the 2 pro form a that we will form during the Q2, which are related to the joint venture of the NPL platform accounting for 24 basis points and the agreement with Credit Agricole Non Agos accounting to 80 basis points. So all in all, we have 11.8% of pro form a fully loaded compared to 11 and 5 of last quarter. The same apply also to the full the phase in which is growing to 13.7 compared to 13.5%. Basically, once We have devoted 2 years of our activity to restructuring and bettering our balance sheet. Now we feel as we mentioned many times that it's time to became more profitable.
We are moderately satisfied of the results we reached, but very committed results. The results through bettering core revenues and still keeping under strict control
results. We will now begin the question and answer session, The first question is from Jean Francois Neuez from Goldman Sachs. Please go ahead.
Hi, good evening. Jean Francois Neuez from Goldman Sachs. The first question I would like to ask is about NII. I was looking in the mix of your loan book. There has been very strong growth in mortgages, but then there has been relatively marked declines in all other categories of loans.
I guess part of that is responsible for the margin erosion year over year. The question I wanted to ask is, Do you believe that this mix has further to shift? And are you do you think that the other portion of the loan book continues to shrink when the rest continues to grow? And do you believe that there continues to do you see continuing erosion of margin on a product by product basis? So for example, your competitor, Ubi, today was showing good margin evolutions, but then they have shrunk their loan book.
So this is you've got obviously margin erosion, but strong growth. That's what I'm trying to compare and contrast. The second thing I wanted to ask is, could you please remind us of your Capital headwinds to come in terms of EBA guideline and other TRIM or anything that might have to come in the next 2 to 3 years and where you believe your steady state common equity Tier 1 ratio has to be? Where you want to run the bank? Thank you.
Okay. So for NII, I think we were quite steady in terms of Asset spread, of course, I saw the announcement of other banks. Basically was At the beginning of the year was a bit easier before the TLTRO announcement to increase interest rate. Now we are having Some more resistance and having of course the commercial network very much devoted to loan growth. Of course maybe we are paying something more.
But again, it's the first time we don't have any reduction in the asset spread. So we are keeping very well. As you can imagine, the spread that were maturing most of time comes from higher spread. So I would say that I am quite convinced that we can have also NII increasing during the year Because we are building up on comfortable spread. Of course, there is also a retail mortgage portion, which is in which there is quite a competition in the market.
We have raised from 25 to 30 basis points To the interest margin, we are having some good results. But of course, the global Spread of mortgage is lower than for corporate.
You think the mix effect is still going to be penalizing going forward or not?
I don't think so because again if we can keep the spread, the asset spread and the rebound we had encouraged me to say that we can still have some good result in this respect With also increasing volume, we should have some increasing in NII. Okay. For TRIM, you're Okay. About 2, 3 years is quite difficult to give you a precise answer because there are many things that are coming. Basically, I can give you a guidance for this year.
I always say that We will be in the region between 11.5% and 12%. We are already 11.8%. So we With profitability we can generate to the end of the year, we can easily offset the TRIM effect that could come.
EBA, can you remind us?
EBA, basically, there is only the AM effect Yes, 25 basis points. Again, inside what we expect to generate as profitability this year.
But the total EBITDA that you expect based of the regulation over time is how much?
Totally in this year or in the next 3 years? I don't understand.
The total impact, the cumulative total impact of EBA guideline.
No, I don't have any other guidance rather than the one we know that is 25, 30 basis points. Okay. Thank you. Thank you.
The next question is from Andrea Vercellone of Exane. Please go ahead, sir.
Good evening. Four questions. First one is on commission income, Where I share your view that is quite disappointing. Can you quantify the amount of upfront fees that you have in this quarter, those that were in Q4 and those that were in Q1 last year. Second one is on funding.
Can you share with us the Average yield on the maturing medium and long term bonds for 20 2020 2021. 3rd is on cost of risk, Actually quite good level in the quarter. Given that you are not selling anything anymore and you're not planning to sell Anything anymore, not that you have anything anymore to sell. If inflows remain at the current level, How optimistic could be to just annualize Q1 in terms of provisioning level? And finally, just a detail.
The PPA turned negative in the quarter. Is that what we should expect going forward, I. E, a negative contribution to the P and L rather than a positive? Thank you.
So let me start from the last one. For the PPA, the impact It's still slightly positive as you can see on page 12. Of course, there is a big reduction In
Excuse me, I mean at net income level, not at NII level.
At net income level should be negative for €3,000,000 but that's Cost of risk, 57 basis points, I would say that it's below what we expected because you know that we had a guidance of 65 basis points to 75 basis points. But I just mentioned to you that the trigger driver that we think are determining the cost of risk and call? Currently all the 3 of them are very encouraging. So let's say that we have some found hope that we can be better than the guidance. The funding average yield is 2.5%, 2.5%.
So we still with the recent funding that we had, we can be inside this average cost. And the commission It's exactly the difference that you have the €50,000,000 difference. Basically, we had €50,000,000 this quarter, €50,000,000 last quarter and €100,000,000 in the Q1 2018. Out of these, as I was mentioning before, around $10,000,000 comes from the Certificates that we have under NFR.
Thank you.
I have three questions. The first one is related to the fees. When I look at the past, there is always a positive seasonality, particularly for Banco even more Then for the old BPM, in Q1 where the network is placing a lot of products and so you do a lot of placing fees. So you have been missing this quarter, which reflect probably also some of the external market condition that you cannot control. So my question is, will we see this year a seasonality Similar to what we've seen in previous years.
So a strong Q1 and then weaker Q2, Q3 And while Q4 is always a bit of a question mark or this product Placing will take place over the next few quarters. Then another question is related, I do apologize for the But I think this is also something people talk about. In relation to this, the Yamo misselling, you took a Strong provision in Q4 last year. The question is if you feel comfortable that that is the end of it or if there is a risk So that more may be needed in the course of the year. And finally, the last question is, if you can remind us The sensitivity of your capital to an increase of 100 bps in sovereign spreads.
Thank you.
Okay. Mr. Cordara, for the fees, No, luckily enough I already told this on the Q4 presentation that this year we would expect Completely different curve starting very low in the Q1 and gaining quarter by quarter. This is why, as you know, we have completely changed our strategy in advisory with our client. Nowadays, we are going more on recovering fees rather than upfront.
As you were mentioning before, that was peculiar in 1 of the 2 bank To have a very strong upfront in the Q1, we completely changed this attitude also to be MiFID compliant. So I would rather expect as I can already anticipating that compared to the 1st 3 months Already April, the beginning of May are 30% better than what we registered in the Q1. So basically, we are growing. We are building up again volumes in order to make to convert into asset under management. We needed some help also from the market because in our strategy of advisory by portfolio, there is There are more opportunity for our network to sell when the market goes a bit better because we have more opportunity to propose Swap of investment to our client.
Meanwhile, when the market go down, it's more difficult to Make this kind of a transaction. So now we are experiencing very good condition. Hopefully, as you were saying, There are also external condition that can help or not this approach, but of course we are also issuing new product which are more compliant with the need of security, Adversity to risk and willingness to be liquid that our clients are showing in the last month. Because you were also mentioning the diamond, I have to say that as you know in the Q1 there was also some New related to that which impacted on our top management Many commercial manager and of course this also may be contributed to have a slowdown in the commercial activity, which again, as I was mentioning before, already since April is performing much better. The third, the sensitivity to the spread, the 100 basis points of Spread, the increase of spread in BTP has an effect in our common equity Tier 1 of about 23 basis points.
Thank you very much.
The next question is from Giovanni Razzoli of Equita. Please go ahead, sir.
Good afternoon to everybody. I have two questions, if I may. One is a clarification on the Slide number 12. That is the NII trend. So if I look at the headline number €555,000,000 in the Q4 and €505,000,000 in the Q1, The decrease is significant, but if my understanding is that there are a couple of components that impacted this trend.
The decrease the €25,000,000 sorry, €23,000,000 decrease in other components reflects the Lower contribution from the PPA as a result of the sale of NPLs. Is this understanding correct? And on the remaining decrease, there is a €12,000,000 related to the calendar effect. And so that's My understanding of the trend in NII, because if I look at the spread, the spread is flat quarter on quarter, the volumes are there. I mean, the spread also incorporated the mix effect.
So there is nothing really Particularly in such a big headline decrease that one may see from, again, the headline numbers. So that's my first question. The second one, you've mentioned that the government bond portfolio has increased also because of the activities of ACROS. I I was wondering whether this reflect the market making activity on government bonds and so shall we consider these increases temporary going forward. Thank
you. I agree. So on NII trend, you were right. We have $25,000,000 coming down from Sorry, yes, €25,000,000 coming down €29,000,000 coming down from the PPA effect, €12,000,000 for the calendar and the rest is almost €14,000,000 We had, As we mentioned in 4Q, some cannibalization of a single asset interest originally due for the full year, which was released in the Q4 for around €8,000,000 So I would say that all like for like is almost the same performance. As far as the Agros portfolio, Agros is only engaged in trading activity.
They are not banking book in the traditional way. So basically quarter on quarter you will see Some different exposure in the trading of ACROS, but it's only temporary.
Thank you.
The next question is from Riccardo Rosare of Mediobanca. Please go ahead, sir.
Good evening to everybody. Just one question for me. May you please break
down the impact of the values elements
That drove the increase in common equity Tier 1 ratio from 10% to 10.8 percent, which looks fairly remarkable. Thanks.
Thank you. Just a minute, I'm getting all the figures. Starting from fully loaded, we have 20 basis points from dividend payout from Argos, 4 basis points sorry, 26 basis points From the ACE and the GAX, 25 basis points from the HTCS bettering results. Our reserve for $130,000,000 11 basis points for Nexi and of course Reducing a 12 basis points for the IFRS 16 effect.
The next question comes from Hugo Cruz of KBW. Please go ahead, sir.
Hi. Yes, thanks. I mean, could you just you said you'll have a new business plan. I mean, could you just Give a bit of an indication what will be the focus of the new business plan? What levers you think you can flex in the next 2 to 3 years basically that was it.
Thank you.
Of course, we are split again as I was mentioning before, There is a portion of residential mortgages which are in the range of 100 The basis point, meanwhile of course the
Sorry, I'm not sure if you perhaps you can't hear me well. I was asking about the new business plan, the strategic plan that you expect to approve by the end of the year. I was just wondering what will be the focus of that plan in order to improve profitability and what key levers You think you can still flex to improve the ROE of the bank? Thank you.
Of course, for the new business plan, you have to wait until the presentation of the 3rd quarter results. But it's not because we don't want to give you information. It's just because as I was mentioning before, we are really Experiencing for this 1st year, I would say a normal year without extraordinary transaction, without devoting energies To de risking, to rebuilding balance sheet and so on. So basically we are trying to devote all our Interest to the growth of the commercial activity, we have to understand also for us, of course, which This kind of market and opportunity we can have during the year and then we will give you of course all the detail with the presentation on the business plan. For sure, we have just to mention something that It comes quite easily to mind.
To my mind is that we have to rebuild a proportion in Direct funding and indirect funding in which we have at least €10,000,000,000 to be utilized in order to Foster the growth of assets under management already in our balance sheet. And of course, we have the 2 Specialized bank, Acros and Aletti, which basically started this new year in the new activity and we will I have some more clue about their opportunity going forward.
Okay. Thank you.
The next question is from Ignacio Charezo of UBS. Please go ahead, sir.
Yes. Hi. Good afternoon. A quick couple of questions from me. First one is on acyclic.
You can repeat because I think I understood 1.2% default rate in the quarter. If you can clarify whether that number is in gross And you can give us Q1 last year and Q4 last year. And the second one is asking whether the 4% year on year decline of the cost base You have booked this quarter is sustainable into the rest of the year. Thank you.
Starting from the cost, I think we have shown during these last 2 years that we are keeping to a strict control of cost. Of course, with 2018, the majority of maneuver We had to implement for the business plan. We're done, but still we have to get some improvement from operating cost and personnel cost. So I think that our target is definitely to stay on this pace of cost cutting. In terms of the full trade, as I mentioned before, the current ratio Show is 1.2% and down from 1.9%.
Thank you.
The next question comes from Domenico Santoro of HSBC. Please go ahead,
Yes. Hi. Good afternoon. Thanks for the call. A couple of follow ups from my side.
First of all, on the 26 bps that you accrued in the quarter as a result of the deconsolidation of risk weighted assets related to transaction. This is regardless of the use of the GACs. So just wondering What could be the plan B? Differently, you already hinted something in the last call. Then on the LGD waiver, any update on this given that the All the final details now are out in the banking package.
And I remember in the last call, you gave some indication About the recurring profit for this year in terms of gross operating profit, I just wonder whether you can give us An update on these qualitatively or numerically just to understand where we could land in 2019? Thank you.
If I understood well, Mr. Santoro, for the completion of the total GACs, What is remaining is only 24 basis points coming from the disposal of the platform Having already factorized the guarantee of the gas on that
So you already basically included the risk of the assets, right, For the deconsolidation, I
mean. Yes, of course. This is already done. What we still have to Put into the common equity. The other one is the disposal of the bank.
Okay, clear. The second one, a bit difficult to give guidance. But again, we think we are Going through what we announced the last year in terms of NII, I can confirm That we feel that with this increase in volumes, we can reach the target. We told that in the last quarter, which was more or less in line with last year of course reducing the Driving effect deriving from the risking. For commission, we think we can be able To recover the slight decrease we have registered in the Q1.
And so I would say that The consensus I think is in line with our expectation.
The next question is from Christian Carrese of Intermonte. Please go ahead.
Yes, good afternoon. Just a clarification On the outlook you gave at the end of the presentation, you're expecting an increase in profitability in the coming quarters. The €150,000,000 net profit had 2 different one off, one positive and one Negative, the one point next on the positive side and the single digit fund on the negative Sai, I was wondering, you are expecting something similar for the coming quarters in terms of net profit. And if you can remind us what is the impact of the DGS in the coming quarter? The second question is on the distribution agreement, the new distribution agreement with Patolica and Anima, it was an old one.
Can you give us an update on How is going the process of the new agreement in terms of new production and so on?
Sorry, I'm getting all the different. So the contribution is €41,000,000 net negative for the single resolution funds and positive €54,000,000 from Nexi. And of course as you know single resolution funds apply Basically only in the first and the third quarter. You are asking last year how much it was?
Yes. So this year, what are your For DGS in the Q3 maybe?
Still it was $32,000,000 I don't know really how much could be this year yet, But more or less the same. This year we have some saving in the first in this first contribution. Dan, you were asking about the different activity with the Asset Management or Bancassurance? Both. Okay.
Now basically again also if I mentioned we have a slow Starting both the activities, not in the bancassurance non life in which we have Growing very well, but in the live production of course, we have Obtained some new product from our joint venture. So during this last week, we are placing very well New production also Ramotetso. So we are recovering having what our clients ask, Which is protection, safe product and possibility to have opportunity to invest in assets which are not very leveraged. So again, the start was not as we expected, that we are already recovering since April.
Call. So on the overall profitability, you would expect something similar to the Q1, maybe At bottom line.
As a guidance, you mean? Yes. Basically, we have we see what we read on the consensus. We think we can have This $550,000,000 per quarter, which is something sustainable for us.
Okay. Thank you.
So thank you very much for your question. Of course, our
Conference Call. Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.