Good morning, and welcome to the Q3 2023 Gentera's conference call. Now, I would like to turn the call over to Mr. Enrique Barrera, Investor Relations Officer of the company. Sir, you may begin.
Thank you. Good morning, and thank you all for joining us and for your continued interest in Gentera. I'm Enrique Barrera, the company's investor relations officer. I'm very pleased to introduce our management team. With us today are Mr. Enrique Majós, Gentera's Chief Executive Officer, Mr. Patricio Diez de Bonilla, Banco Compartamos Chief Executive Officer, and Mr. Mario Langarica, Gentera's Chief Financial Officer. Enrique Majós and Mario Langarica will present Gentera's results for the Q3 2023 period, as per the report that was issued yesterday. Patricio Diez de Bonilla, along with Enrique and Mario, will actually participate in the Q&A session of this conference call. Please note that during this presentation, Gentera may make forward-looking statements. These do not account for future economic circumstances, industry conditions, company performance, or financial results.
Additional information on forward-looking statements can be found in the disclaimer located in our earnings release. If you did not receive a copy of the release or you have any questions, please do not hesitate to contact our investor relations department in Mexico City. If you are a member of the media, we ask you to contact us directly. I would now like to turn the call over to Mr. Enrique Majós for his presentation. Enrique, please go ahead.
Thank you. Good morning or afternoon to everyone. As we do it every quarter, today, I'm happy for the opportunity to share with you our latest results. As you know, Mario, Enrique, Patricio, and myself have had the chance to speak with you or some of you at the different investor events during the last quarter, and we truly appreciate the benefits of the feedback we constantly receive from you. But before starting talking about Gentera's results, let me say that we feel sorry for the people in Acapulco. Since yesterday, Hurricane Otis strongly impacted them. From the moment we learned about the approach of Otis, we have activated our contingency protocols, and we have our teams addressing the situation. In Gentera, taking care of our staff and clients has always been our priority, and today, we are fully committed to support our people in Acapulco.
As you know, we have faced this kind of event several times in the past, and we have the experience to manage them. We are still assessing the impact of this event. However, we can tell you that Acapulco represents less than 1.5% of the portfolio of Banco Compartamos and around 1% of Gentera's portfolio. We believe that the impact in our business results will not be significant. However, taking care of our people will always be our main concern and top priority, and we are fully focused on supporting them. Now, talking about our Gentera business results, I'm glad to announce another great quarter. Our results are the direct and positive consequence of our business strategy and the remarkable execution of our teams.
But first, to give you some context on our results, let me begin by describing the journey we have been going through along the year. As we all remember, the COVID pandemic impacted every person and business around the globe. Also, at that time, Gentera's priority was to support customers and staff members. In 2020 and 2021, our business results were strongly affected, as it happened in most of the industry. 2021 and 2022 were years of recovery. We sorted out the crisis, and finally, we ended stronger. Not only financially, our relationship with customers, our processes, and our operations also became stronger. However, many of our competitors struggled, and as of today, some of them are still having funding problems as well as collection challenges.
This has been an opportunity for us to grow and increase our market share. Actually, after the pandemic, and based on ProDesarrollo's portfolio information, in Mexico, we increased our market share from 47%-63% with our group lending products, and for the individual loans, we also increased our share from 11%-20%. And in Peru, we have built a stronger position in the market by becoming the second-largest financial institution in number of clients, and today we have a presence in 21 from 25 regions in the country. Looking at this opportunity, it was that we decided to be more aggressive in our growth strategy since the beginning of the present year, as we explained in our last call, during the H1 of the year, we increased our sales force in Banco Compartamos to be able to aggressively capture more clients and increase our portfolio.
As a consequence, our operating expenses increased in the previous quarters. However, last quarter, we explained that this was going to pay off. Today, growth results are here. This year, we are growing in number of clients and portfolio more than ever, so we are delivering as promised. Now, having described our strategy for the present year, let me now highlight some of our most recent and relevant results. Portfolio growth in the Q3 of the year was remarkable. Just in the last three months, Gentera total portfolio growth grew close to 5%. Gentera's total loan portfolio reached a new historic figure, closing at 60.5 billion MXN, which represents more than 17% growth in the last twelve months. And by the way, this portfolio growth is above the 14%-16% that we had in the previous guidance.
In terms of number of clients, we have reached an annual growth of 412,000 clients. From them, 222,000 come from Banco Compartamos. This is a historic growth never seen before in Gentera. These results are even more solid if we consider that our NPLs are in 3.29%. We have always said that for us, a healthy and solid operation should show NPLs between 3.5% and 4%. So clearly, we are in very good shape. This quarter's results are outstanding. They validate the rationale behind our modernization and business strategy. For Gentera, this evolution is more than just technological. It is an evolution that improves relationship with our customers and our business processes. This is also a cultural evolution.
It reflects our commitment to generate total value, fostering an environment where economic, social, and human value flourish in a sustainable way. Let me finish by saying that due to the successful results on our client and portfolio growth strategy, we are increasing our portfolio guidance for the present year. At the same time, EPS guidance will be reduced due to the investment we've made to capture an even higher future, future growth. Mario Langarica will provide the specific information about this and other relevant financial highlights, so let me now pass the call to him. After Mario's remarks, Patricio, Mario, and myself will be very glad to answer any questions you may have. Hi, Mario, thank you for being here.
Thank you, Enrique, very much, and good day to everyone. As always, we appreciate your interest in Gentera. As Enrique signaled in his remarks, we're very excited with Gentera's dynamics in the past quarters, and with the solid results that that are materializing for year-end, and with the great opportunities that lie ahead for 2024 and going forward. I will focus my remarks on the following concepts: one, portfolio growth and income generation. As Enrique mentioned, Gentera finalized the quarter again with a historic loan portfolio over MXN 60.5 billion, growing 17.8% compared to 3Q 2022. The trends we are expecting look very promising. This growth was significantly driven by an important 12.4% growth in clients.
As Enrique mentioned above, we expect to end the year 2023 with a growth over 500,000 clients, a historic record, about 40% of our best year ever. As mentioned in our last conference call, the actions that we took early this year to take advantage of the strong market opportunities are generating these solid results and re- and relevant revenue flows, and will continue to do so during 2024. Accumulated net revenues as of 3Q 2023 have grown 10.8% versus last year, and growing-- and increasingly growing every quarter. Interest income for the 2023, nine-month period stood at MXN 23.6 billion, growing 14.7% compared to the same period in 2022.
While we have had an important increase in financing and origination expenses, net interest income grew MXN 1.4 billion or 7.7% for the same period. As a consequence, NIM amounted to 39.6% for the 3Q 2023 period, compared to 41.3% in 3Q 2022. Our expectation for the following quarters is to be moving around 40%. Accumulated provision for loan losses as of 3Q 2023 amounted to MXN 4.4 billion, 19.2% higher than the same period in 2022. This higher level of provisions is mostly explained by the strong portfolio growth in all subsidiary, and higher but normal level of NPL.
Accumulated net interest income after provisions grew 4.8% compared to the same period in 2022, with a 30.8% NIM after provisions in 3Q 2023, compared to 32.3 in 3Q 2022. Our expectation is to have NIM after provisions moving around 30%-31% going forward. Regarding net fee, fees for the nine-month period, we have generated a 59.7% growth compared to the same period in 2022, amounting to MXN 22.05 billion. Our insurance business has continuously evolved to represent a strong contributor to our revenues, together with other fees generated by Compartamos Financiera, ConCrédito, Yastás, and the bank. And we expect that this item will grow above 40% for the full year.
We want to highlight that as of 3Q 2023, around 76% of our credits were made, and around 41% of our credit collections in the bank are now being executed through Yastás and Banco Compartamos branches, and more frequently now through our mobile banking app. The use of these channels has benefited Gentera independently of the use of third-party channels, and thus reducing the fee expense line in relative terms. Two, asset quality. As of September 2023, cumulative cost of risk amounted to 10.3%, and NPLs stood at 3.29%, which are both better than our initial guidance and expectations. Allowances amounted to MXN 4.57 billion on a consolidated level, and our coverage ratio in 3Q 2023 amounted to 230%, which is a solid and adequate level.
For future quarters, we expect to maintain sound asset quality, both in cost of risk and NPLs, maintaining robust coverage ratios above 2,200%. Three, operational expenses. Accumulated operational expenses as of 3Q 2023 amounted to MXN 12.5 billion, representing a 13% growth compared to the same period last year. As we explained before, an important component of this growth relates to the actions that we have implemented to capture the strong market opportunity, including hiring more than 3,800 employees, most of them in our sales force. Other important expenses are the relevant strategic investments that we're implementing to make our operation more productive, efficient, and modern. These actions are already generating growth in clients, portfolio, and revenues, for an important part of the income will be captured in 2024.
We expect to end with a year-to-year around fifteen percent increase in expenses, but very committed to maintain positive jaws in 2023 and 2024. Net income and profitability. Net income in 3Q 2023 amounted to MXN 1.35 billion, representing our second-best quarterly historic result. Cumulative net income for the nine-month period stood at MXN 3.82 billion, also the second-largest cumulative result ever for the same period. Gentera's controlling participation amounted to MXN 3.6 billion, representing an EPS of around 2.27. And as mentioned in our press release, we are revising the year-end guidance to a range between 3.04 and 3.14 EPS.
Again, this reduction is mostly explained by the investments and credit placement expenses that we're incurring to capture the market opportunity that is generating very strong growth in clients' portfolio and revenue generation, and will continue to do so, generating future EPS growth in the following quarters and in 2023 and 2024. Gentera's controlling ROE for the nine-month period reached 19.8, which is on track to meet the expected 20% objective for the year. Highlighting that Banco Compartamos, our largest subsidiary, continued with very strong levels of profitability, representing in the nine-month period, an ROE of 25.7% and an ROA of 8.1%. Compartamos Financiera in Peru presented an ROE of 17.5, above the one reached last year, and ConCrédito's ROE improved to 21.8 from 16.7% last year.
Having said that, and given the strong loan portfolio dynamics that we're witnessing now, we expect to finalize the year-end at the high end of the loan portfolio guidance for the year, and to have double-digit growth in the year 2024. Five, liquidity funding and capitalization. We continue maintaining healthy liquidity and very strong access to funding and robust capitalization levels. Our liquidity position amounts to MXN 13.1 billion, and by the end of the Q3, Gentera's capital to assets ratio amounted to 32%. Regarding funding, we continue with strong access to different incremental funding sources for the holding company and our subsidiaries. And we have kept a healthy balance in the composition of our liabilities in short and long tenors, and fixed and floating rates.
Our access to funding sources are robust and sufficient to fund the growth, and at the same time, take the advantages of the opportunities that this year and the next ones will bring to Gentera. A proof of this very strong access to funding are the recent and very successful debt issuances at the Banco Compartamos and FinÚtil okay, which is part of ConCrédito, did this year and executed very successfully in the local debt capital markets in Mexico. We also want to communicate that the second and final dividend payment of the year 2022, amounting to MXN 910.8 million, will be paid on November 17, as approved on our last annual shareholders meeting. And now for my final remarks.
As you can see, we are concluding the Q3 with very solid drivers and results, and we have the clear objective to deliver another strong year, in which Gentera will reach the largest number of clients ever served, the largest growth in number of clients ever, the biggest loan portfolio, and the best net income generator in our 33 years of history, and delivering an ROE around 20%. For 2024, we expect to continue delivering double-digit growth in Gentera loan portfolio, double-digit growth in net revenues, with a healthy cost of risk and operational expenses under control to generate positive jaws that should allow us to maintain ROEs above 20%.
As such, and just as closing, our new guidance for year-end is a growth in our portfolio of 16%-18%, and in our EPS from MXN 2.304-MXN 3.14. In Gentera, we're strongly motivated with the solid evolution of the company, and at the same time, very enthusiastic to continue working hard in servicing millions of clients in Mexico and Peru in their financial needs while generating share value for all. That is all for my remarks. Thank you for your attention, and we can now move forward to the Q&A.
Thank you. Ladies and gentlemen, to ask a question, please press star one on your telephone keypad at this time. If you are using a speakerphone, please make sure that your mute function is turned off to allow the signal to reach our equipment. Once again, that's star one at this time. One moment while we poll for questions. Our first question comes from Ernesto Gabilondo with Bank of America. Please proceed.
Thank you. Hi, good morning, Enrique, Patricio, and Mario. Thanks for the opportunity to ask questions. My first question would be on operating expenses. We have seen the OpEx growth is double digits, and I think, above, what you mentioned before and the expectations. But we also know-
Ernesto-
with new hirings and staff here to
Ernesto, sorry to interrupt you. The line is a little blurred. It can-- I, I'm sure you're trying to speak very clearly, but we have a little disruption in the sound. Can you state again your question, please?
Yes, of course. Can you hear me better?
Yeah.
Perfect. My question is on operating expenses.
Okay.
So we saw OpEx growth is already above your guidance for the year. But it is also true that there have been new hirings that have helped to improve the loan growth, and the guidance for the year. So, I think can you please tell me, then how should we think about the OpEx growth for next year? Should it be in line with inflation, a little bit above inflation, anything on that would be very helpful. And then on my second question is if you can remind us your sensitivity to rates. So for every change of 100 basis points, what is the impact in millions of MXN? And for my last question is, are there any earnings expectations for next year?
There is not an official guidance, but you expect earnings to accelerate next year and likely to have an ROE above 20%. What would be the key drivers behind that? Thank you.
Yes, thank you very much, Ernesto. Well, regarding operating expenses, well, we have been speaking about this for a while. Yes, as you said, most of the growth in operating expenses is sales expenses. So, it's very, very aligned to the growth of the clients and the portfolio. So our main objective is to keep expenses below the growth of total revenues. So our objective for next year is to focus more on expanding the jaws gap, the positive jaws gap, and therefore aiming to achieve ROEs around 20, hopefully, a little bit in the low 20s.
Obviously, what we will not stop doing is investing to take the opportunity on the market that every day we see more clearly. Now, regarding rates, well, now at this point, 100 basis points, given our variable rate structure, which presents—could represent a positive MXN 420 million improvement in the financial margin line. And, obviously with the guidance, we will tell you what are, in February, what are our expectations for rates during 2024. Again, as probably, to wrap up what we expect for next year, it's double growth in portfolio, control cost of risk, probably in the same levels that we guided at the beginning of this year.
Again, this is not a formal guidance, it could be between 10.5 and 11. Obviously, controlling operational expenses to get these positive jaws that I just explained, with the objective to generate a double-digit growth in EPS, in revenue, in net income, and with the intention of having an ROE above 20%.
Excellent. Just to follow up on this last one, we should expect accelerated earnings growth compared to this year. Now, since this year you are delivering around 10% growth, we can expect a little bit more between the three, considering what you mentioned. Now, obviously, loan growth probably benefiting on lower rates at Hong Kong, control cost of risk, and control on operational expenses. Is that reasonable?
It's feasible. Yeah, if everything aligns and we see, as expected, the growth in the portfolio, I told you, a better-than-expected rates environment, and we control expenses, we could be in the low 20s.
Perfect. Thank you very much.
Thank you. Our next question comes from Tito Labarta with Goldman Sachs. Please proceed.
Hi, good morning, thank you for the call and taking my question. Just one question, your fee income, you know, very, very strong. Just to think about the sustainability of that going forward, both on short term, you know, anything extraordinary that maybe corrects next quarter, and thinking longer term, how fast you can continue to grow, fee income, given the strong performance this quarter? Thank you.
Thank you, Tido. Thank you very much. Well, yes, as you said, this year has been an extraordinary year in fee income generation, mainly driven by the insurance business. And specifically, as part of it, it's composed of some non-recurrent revenues that have to do with an adjustment in the claims ratio of the insurance business. For next year, what we should expect in net fees generation, is that it should be probably around 20%, following the growth of clients and portfolio.
Great, thanks, Mario. Just that claims adjustment, can you quantify that? Should that revert early next quarter, or what was the impact of that?
We need to review that, because every year we have to do the adjustment with the insurance company. So, probably we can give more detail once the year finishes and in the next guidance.
Okay, great. Thank you.
Bye.
Our next question comes from Olavo Arthuzo with UBS. Please proceed.
Yes. Hi, guys. Hi, everybody, thank you very much for taking my question. One thing, on the EPS growth for the next year, and just for us to understand a little bit more on the composition, the breakdown of it. I just would like to understand about the asset quality trend in Peru, because I believe those operations should foster the EPS growth for the next year, if I'm not wrong. I just wanted to understand a little bit more on the trend that we could expect going forward, because after the first Q and the second Q, the high deterioration in the delinquency rates in these two years, I just wanted to understand, considering only the 10 basis points increase this quarter.
I just wanted to understand if we can affirm that it has reached the peak in delinquency in Peru, or we should see still in the 4Q some kind of normalization. What could we expect this for the 4Q and also for the next year? Should we see improving a Cost of Risk and also the NPLs in that subsidiary? Thank you very much.
Thank you, Olavo. This is, this is Patricio. Peru's portfolio got affected in the Q1 of this 2023 because of social movements at the beginning of the year, as well as the impact of the Niño weather climate events, right? Strong rains throughout the country affected the operation, and mostly on the group lending methodologies. We've been dealing with higher delinquencies throughout the year, since the Q1, but we are seeing better trends since July. What you should expect is that NPL should trend downwards, but we are expecting, again, during the summer of Peru, another potential impact of El Niño during the Q1 of this 2024. Again, yes, the first impact, it's already under control. You should expect this quarter to continue the trend downward...
That shouldn't affect the growth expectations for the Peruvian business for this 2023. And we will be very careful about what would be the impact of the rains and climate events during the Q1 of 2024. Depending on how strong they affect the country, will depend on if the NPLs will stabilize or maybe go upwards a little bit. However, regardless of such events, we have a strong coverage today to make progress in that regard. So you shouldn't see an impact in the results for the Peruvian business, regardless of the NPLs of this subsidiary.
Mm. Okay, okay. Just to follow up on this, on your Peru operations, just for us to understand the potential here, what is the target ROE that you guys, like, have for the Peru operations?
Well, yeah, in Peru, our objective is to be above 20%, and that is not only for Peru, it's for all our subsidiaries.
Okay. No, okay, okay. Thank you very much, guys.
Thank you, Olavo.
As a final reminder, ladies and gentlemen, press star one at this time to ask questions. Our next question comes from Jorge Henderson with Santander. Please proceed.
Hi. Hello, thank you for the opportunity, and congrats for on the results. I have a question about your client growth. You mentioned that you gained market share both for group loans and individual loans due to new competition in Mexico. I wanted to ask what is the profile of these new clients? Very different relative to your current client base, and also is this more focused in individual lending? Thank you.
I don't know if I got your question correctly. You were asking about client growth in Mexico, right? Sorry.
The profile of the clients, right? Like, any color, if you're growing more in individual methodology or group lending? I mean, you mentioned about the market share gain that you got in the last year. But, and just in general, any comment that you make might not, may not there. Thanks.
Okay, perfect, Jorge. In terms of client growth, as we said earlier, the year in group lending, we saw a benign environment to growth given the fact that our competitors are facing operational and funding difficulties. So, we hire people and we tap the opportunity. So what you've seen in group lending methodologies is that we are growing very fast because we made adjustments in the product that make easier and more flexible the product to the end user, and this is why on group lending, you are seeing a strong momentum of this portfolio. On the individual side, again, this product has been growing about 50% for the last three years.
We are this quarter representing a 58% growth year-over-year, and we see this portfolio to be continuously growing for the 2024. So in both product offerings, both in individual lending and group lending, today, Banco Compartamos is the leading provider of working capital loans in both portfolios. So we should expect strong growth momentum, as Mario said, for 2024. And this is why we will continue to invest, because we see the opportunity of under-addressed market, both in Mexico and Peru.
Okay, just a follow-up. I also wanted to ask about the client growth in Peru. You grew 7% quarter-over-quarter. I mean, what is the driver there? And also, what is the profile of these new clients in Peru? Thank you.
Right. In Peru, we are growing against both portfolios, again, the competitive landscape. Some cajas and other institutions are also facing difficulties operationally, and we see an opportunity to grow on the individual lending side, as we've seen. But most importantly, what we are doing is to exploiting the opportunity to grow on the group lending side. We've opened 12 new branches in the country. We have now the infrastructure to tap on the new markets in the country. So what you should expect is to the growth momentum for Peru will continue in terms of customer growth for 2034.
Okay, that's, that's useful. Thank you very much.
Thank you.
Thank you. Our next question comes from Carlos Gomez with HSBC. Please proceed.
Hello, good morning. Thank you for taking my questions. Two questions. The first one, a technical one about the insurance result, the insurance... So again, it's an adjustment to the claims.
... that I believe you agreed with your provider. Is that in Banco Compartamos results or that is in the insurance results, which is not consolidated there? I was just curious about that, where it is. And again, if you can give us an idea, about are we talking about MXN 10 million, MXN 100 million, MXN 1 billion? What order of magnitude of adjustment are we talking about? The second one refers to your business in Mexico, Banco Compartamos. It's growing very strongly, 26%, but, you know, when we look at the NII, it's grown only 8% year-on-year. For the first nine months, it's 9% year-on-year, whereas your expenses are growing at 18%, right? So you seem to be having negative operational leverage here.
Is the NII going to recover once the interest rates come down? Or, what is the prospect for your core business to improve from here? Thank you so much.
Thank you, Carlos. I will jump into the insurance business. Compartamos sells different insurance products to their customers. Also, the same thing happens with ConCrédito, the same thing happens in Peru. So we sell insurance product to the consumers and those fees are registered in the NPL, in the PNLs of each subsidiary. However, we use our own broker, Aterna. Aterna also generates fees in order for every policies that we sell. The risk associated to those products, it's with MAPFRE. Now, we use in every subsidiary, MAPFRE as an insurance company, so they also get a share of that line of business.
And as Mario mentioned, the fee income growth that you saw this quarter, the jump that you are seeing, is mostly driven by the insurance product, and we expect for 2024 that this growth momentum will continue. Yes, and regarding your question about the income statement of the bank and the NIMs, well, this is temporary. And specifically at this quarter, we have two events that affected the calculation of the margin. Number one, we have a much higher portfolio at the end of the quarter, and so that makes the denominator grow, and therefore it has an impact on the margin.
And also, we have increased liquidity because we just received the funds coming from the bond issuance that we set. And obviously, we have, at the operating expenses level, the same dynamic that we explained before for Gentera of all of these growth in loan officers that we hired and the cost of generating clients and placements. So, we expect that the margins for the bank should be around 50% NIM and around 40% NIM after provision, and we should get a recovery on that going forward. And obviously, that is not taking into account a potential improvement because of the reduction of rates.
Okay, and going back to the insurance. Very good. So do you expect 20% growth, but is that 20% growth on the total insurance income? And if I analyze your fees this quarter, it will be MXN 2 billion-
For the net fees. So you expect 20% growth on net fees, including that insurance income, or do we need to subtract that to calculate your fees for next year?
Yeah, like I use around a 20% net fees number.
All right. Again, those net fees in the first nine months would have been MXN 2.046 billion, right?
Mm-hmm.
Okay. All right, thank you so much.
We have a question from Rodrigo Ortega, from BBVA. Could you provide us details of where the expectation of achieving growth of 18% this year come from some sort of losses in the state of Guerrero after the hurricane? What kind of losses are you expecting from this event?
Thank you. As Enrique said during his remarks, we are still assessing the impact of, on the Guerrero portfolio. In Guerrero, we have six... In Acapulco, we have six offices, 250 employees, and close to 40,000 customers. We have a portfolio of MXN 450 million, which we—what we normally do in these kind of circumstances is evaluate the impact that the hurricane had in both customers and employees, and depending on such impact, we provide different alternatives, from humanitarian aid to refinancing additional loans, et cetera, to reignite the local economy. Again, it's, I guess, still soon to tell specific details.
... However, I just want to point out that it's just a piece of the portfolio still, a piece of the customers, but we are very carefully looking at what the impact had, because the—I mean, it was, it got very affected, all the economy in Acapulco.
We have a follow-on question from Rodrigo. You are guiding double-digit growth for loan growth next year, but could you share a bit more light on the range expected, taking into consideration that you continue to hire in all your subsidiaries?
Formal guidance will be given in February after the year-end. We just want to give an expectation of that the growth momentum that we are seeing in every subsidiary will continue above the growth in GDP, for example, or inflation. But formal guidance will be provided in the next conference call in February.
Okay.
At this time, I would like to turn the call back over to management for closing comments.
Well, thank you. As always, it's a pleasure to be here with you and talking about our quarterly report. Looking forward, our strategy is clear: to continue improving customers' experience and efficiency for the business across all our subsidiaries. Let me just say that I'm very... I feel a deep, deep gratitude for the trust and support of our clients in the first place, but also of our staff members and of course our shareholders and the rest of our stakeholders. So thank you so much. Have a nice day, and we are closing to the end of the year, so good expectations and looking forward for that.
Thank you, ladies and gentlemen. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.