Good morning, everyone, and welcome to Nemak's Q2 2023 earnings webcast. Armando Tamez, Nemak's CEO, Alberto Sada, CFO, and Denise Reyes, Investor Relations Officer, are here this morning to discuss the company's business performance and answer any questions that you may have. As a reminder, today's event is being recorded and will be available on the company's investor relations website. I will now turn the call over to Denise Reyes.
Thank you, operator. Good morning, and welcome everyone. We very much appreciate your participation. Armando Tamez, our CEO, will lead off today's call by providing an overview of business and financial highlights from the quarter. Alberto Sada, our CFO, will then discuss our financial results in more detail. Afterwards, we will open for a Q&A session, which participants may access via dial-in or webcast. Before we get started, let me remind you that information discussed on today's call may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions you not to place undue reliance on these forward-looking statements. Nemak undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. I will now turn the call over to Armando Tamez.
Thank you, Denise. I'd like to introduce Denise, who has been with us for the last 16 years in different roles in the company, having a great career, and I'm very confident that she will do a fantastic job. I'd like to welcome Denise to her first conference call as our Investor Relations Officer, and I wish you the very best in this role. Hello, everyone, welcome to Nemak's Q2 2023 earnings webcast. During the quarter, we recorded a positive top-line trend as new product launches and increased customer production supported higher volume amidst improved supply chain conditions in the automotive industry. Notwithstanding inflationary pressures, our EBITDA was solid, driven by a strong volume and efforts to mitigate the impact.
While inflation persists, there is progress in discussions with OEMs to secure compensation retroactive to January 1st of this year. Our goal is to conclude these negotiations during the Q3. Turning to strategy execution, we continue to ramp up recently awarded business to produce parts for electric vehicles, advancing with the setup of new facilities dedicated to producing battery housings in Mexico, Germany, and the Czech Republic. We initiated test production at our facilities in Germany, keeping us on track to reach series production at that location by the end of this year, which is roughly the same timeframe we're anticipating for the new facility in Mexico. Additionally, we made further strides towards setting up production in the Czech Republic. We're currently in the process of configuring equipment that is expected to start production in 2024.
We also continued to expand production for electric vehicle parts at our existing facilities, launching series production of new chassis applications for fully electric SUVs and crossover for the European market. These components were engineered with a black box design concept, harnessing our design, simulation, and casting capabilities to deliver solutions that support and protect critical parts, such as the electric motor. As a result, we directly contribute to our customers' objective of reducing weight and therefore increasing the driving range of these vehicles. Moving on to commercial activities. We made further inroads in growth opportunities linked to electric vehicles in the quarter. We won new business to deliver battery housings for fully electric applications of a leading Europe-based manufacturer of heavy commercial vehicles. We will draw largely on existing capacity to produce these parts, leveraging our capabilities across cutting-edge castings, as well as joining and assembly processes.
I would like to highlight our contributions to guiding design, innovations, and engineering, which enabled us to deliver a solution that fulfilled customer expectations across key metrics, including weight reduction, thermal management for batteries, and the product noise, vibration, and harshness performance. Altogether, we expect to supply multiple battery housings per vehicle, reflecting the considerable size and battery capacity requirements of heavy commercial vehicles. This business amounts to approximately $90 million annually and brings the order book in our mobility structure and chassis application segment to approximately $1.72 billion annually. For this program, we are developing a roadmap in conjunction with the customer to reach zero emissions by 2032. This ambitious goal provides strategic support to our customer's vision while reinforcing our own commitment to reduce our CO2 footprint by the end of the decade as we evolve towards carbon neutrality in the long term.
Additionally, this project confirms the attractiveness of the heavy commercial vehicle segment as it transitions to electrification, reflecting the impact of new legislation in facilitating the advance of electric mobility. The adoption of more stringent adoption targets has already served as a catalyst for vehicle manufacturers to make electrified offerings central to their long-term production plans, particularly for passenger vehicles. This is increasingly true for commercial vehicles as well, including light, medium, and heavy categories. I would like to underscore that these opportunities in the heavy commercial vehicle segment represent additional business for Nemak, particularly when considering the multiple battery housings requirements, as well as the relevance of aluminum contribution to lightweighting, and therefore, increased driving range.
As we continue making substantial inroads into electrification, new product launches and revenue from our e-mobility, structure, and chassis segment have led us to a current run rate of more than $600 million annually, and growth of 28% year-over-year. In conjunction with our efforts in the electrification segment, Nemak continues pursuing ESG initiatives. Addressing our social agenda, Nemak Mexico received recognitions as a socially responsible company from Cemefi, the Center for Philanthropy, for the fourth consecutive year, meeting that organization's high standards of measuring and evaluating best ESG practices. Nemak understands that companies that voluntarily integrate environmental and social value into their business, not only improve their own operations, they have powerful, positive impacts on society as well. I am also pleased to announce that we received recognition from Hyundai as Supplier of the Year 2022 in Europe and South America.
These awards reflect our capabilities in co-designing lightweighting solutions alongside our customers, while shaping a strategic collaboration between the two companies. In line with our guiding values, our people remain engaged and committed to innovating and delivering high-quality, comprehensive solutions that address our customer needs. This concludes my initial remarks. I will now hand off the call to Alberto.
Thank you, Armando, and good morning, everyone. I will guide you through a quick recap of industry trends during the quarter, followed by a summary of our financial results. Despite mixed global economic conditions, including persistent inflation, as well as continual improvement in automotive industry supply chains, we achieved double-digit top-line growth compared to the Q2 of last year. This increase was attributable to higher volume, driven by sustained improvement in light vehicle production and new product launches in our e-mobility, structure, and chassis segment. In the quarter, light vehicle sales in North America grew 17% year-over-year, supported by pent-up demand and sustained production growth. Supply chain conditions continued to ease, namely in semiconductors, which led to a 12% growth in production. In Europe, light vehicle sales showed slight growth, and production rose 9%, driven by the same factors seen in North America.
Light vehicle sales in Brazil showed a 1% growth year-over-year, and production, an 8% increase, as OEM sustained activity in the region. Lastly, in China, sales increased by 10%, while production increased 34% year-over-year, as recovery from the country's zero-COVID policy continues. Transitioning to our financial results, volume was 10.9 million equivalent units, up 11% year-over-year, as production among Nemak's customers continued to improve across all regions, together with the ramp-up of e-mobility, structure, and chassis components. Revenue was $1.3 billion, up 11% year-on-year, attributed to the higher volume and improved product mix. Compared to the Q1 of 2023, revenue rose 5%.
EBITDA for the quarter increased 3% against the same period last year, standing at $153 million, as incremental revenue, together with customer negotiations, more than offset the cost headwinds during the quarter, such as launching expenses, the appreciation of the peso against the US dollar, and inflationary effects. We continue to make progress on inflation negotiations with our customers. EBITDA per equivalent unit fell 8% on a year-over-year basis to $14 per piece. This was largely due to the impact of the appreciation of the Mexican peso and the US dollar, launching expenses, and inflationary impacts. Sequentially, we saw an improvement of 14% from $12.3 per equivalent unit. Operating income for the quarter was $64 million, down 13% against the figure posted in the same period last year.
It was largely derived from higher production costs due to inflation and $6 million of impairment of obsolete assets in North America, as well as the same drivers that influence EBITDA. Net income for the quarter was $20 million, compared to the $30 million in the same period of 2022. The decline can be explained by the lower operating income, higher interest expenses, and foreign exchange losses. Shifting our attention to capital locations, we uphold our commitment to prioritize strategic investments aimed at capturing additional opportunities in our e-mobility, structure, and chassis segment. We remain selective in pursuing new business with the ultimate objective of driving sustainable and profitable growth. During this quarter, our investments amounted to $131 million, in line with our full-year guidance.
The majority of these funds have been invested in the introduction of cutting-edge product offerings within our e-mobility, structure, and chassis segment. These new products are all part of the groundwork we are laying for our transformation to e-mobility. Working capital increased by $57 million on a sequential basis, following seasonal dynamics, reflecting higher volumes and the ramp-up phase of new products. As of the end of June, net debt was $1.5 billion, up 7% versus last quarter, and 29% higher versus the same quarter of last year, derived from investment needs and working capital requirements. Net debt to EBITDA and interest coverage ratio were 2.7 x and 6.6 x, respectively, versus 2.5x and 7.5 x in the Q1 of this year. Moving on now to regional results.
In the quarter, volume in North America increased 12% year-over-year to 5.9 million equivalent units. This growth was driven by increased light vehicle production levels and successful new product launches within our new segment. Consequently, revenue in the region grew 10% compared to the Q2 of 2022, topping out at $727 million, primarily on the back of higher volumes. Despite these positive outcomes, EBITDA was $74 million, an 11% decrease against the previous year, as higher volume and improved product mix were offset by the appreciation of the Mexican peso against the dollar, launching expenses and inflationary pressures in the region. In line with the dynamics in North America, volume in Europe was 8% higher year-over-year, totaling 3.7 million equivalent units.
Revenue was $446 million, up 13% against the same period last year, mainly to higher volume. EBITDA was up 8% year-over-year to $61 million, as volume and improved product mix more than offset inflationary impacts and launching expenses. Rest of the world volume increased 18% year-on-year to 1.4 million equivalent units. Revenue was $149 million, up 6%, derived from increased volume. EBITDA was $18 million, 113% higher than the same period of last year and similar to last quarter's level. This was mainly attributed to improved product mix and new product launches. This concludes my presentation. I will now turn the call back over to Denise to open the Q&A session.
Thank you, Alberto. We are now ready to move on to the Q&A portion of the event. As a reminder, participants may ask questions directly via dial-in or send questions in writing via web. Operator, please instruct participants calling in on how to place their questions.
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from Alfonso Salazar with Scotiabank. Please proceed with your question.
Thank you. Good day, everyone. I have three questions. Sorry. The first one is regarding the transition that we are experiencing in the industry and more and related to the speed of the transition. It appears to me that it was very fast at the beginning, but it might slow down, which means that it could be that the combustion engine is going to be here for longer than we probably were thinking. It could even lead to a mismatch between what OEMs are projecting in terms of conversion to EVs and what the market wants.
That's very important, especially for North America and for the US, based on the recent polls, which basically say that there's a good fraction of our population that doesn't want to buy an electric vehicle yet. Just wanted to hear your thoughts about that and the implications for Nemak. The second one is regarding the profitability of the new business. And the reason why I'm asking is because we have seen how there is a price war that Tesla started, and that is certainly going to hit profitability of other OEMs trying to, you know, enter the EV market. On top of that, what we hear is there is more competition for auto parts and especially for battery trays.
That is something that is, could be a concern going forward. The third and last question that I have is regarding free cash flow generation, your projection for the H2 of the year and for 2024, if you can give us some color on that front. Thank you.
Yeah. Thank you, Alfonso. I will take the first two questions. Related to the transition, definitely what we are seeing is, we're participating in three main regions, Europe, North America, and the rest of the world. What we are seeing, for instance, is that regulations in Europe are very strict, and they have the OEMs', high penalties for not complying with the, let's say, the reduction on CO2 and they have already a mandate to have by 2035 only vehicles that doesn't produce any emissions. In North America, I think it's, is different. Certainly they have, I would say, less restrictions, and it will be more depending on, let's say, if the customer will be willing to buy electric vehicles.
We are seeing, for instance, in our case, a rapid growth. As I already mentioned in my script, we have seen already a higher than $600 million for this year in revenues on electric mobility, structural components, as well as chassis. Also, we are prepared. We have a capacity for the internal combustion engine, and certainly we will watch closely how the market develops, and certainly we will be prepared with the flexibility, again, to produce either one. Certainly, if it takes a little bit longer than what the OEMs are anticipating, that would mean for us less CapEx going forward. I think we're well prepared in the two sections.
In terms of profitability, as we have indicated, we are experiencing already higher profits on the new business than in the legacy one. Certainly, we are getting sure that in our contracts, we have certain protection in the event that the volume doesn't materialize. I think, we are also being conservative in that regard. I think, what we have seen already in both markets is that volumes, not only in North America but also in Europe, are stronger. We're enjoying those things. Related to the free cash flow, Alberto, please.
Sure. Thanks, Armando. Yes, certainly, we have seen an increase in cash needs for the company in the H1 of the year, and those associated with, as indicated before, with the CapEx schedule that we have for the year. We are fully engaged on our transformation, and therefore, we are investing most of that CapEx into the new segment. The traditional working capital needs that are normally higher in the H1 of the year, and then tend to gradually reduce on the H2. We expect a reversal of that cash injection that we did to the business in that H1, on the H2. Roughly half of what we invested will be recovered, both by working capital changes.
We have a few toolings that we need to still recover and, eventually the cycle recovery as of the end of the year. We should see a reversal of about half of the cash that we invested in this H1, to achieve a leverage ratio similar at the end of the year to what we had at the end of last year. Right now, it's a temporary higher leverage due to that incremental cash needs, which will gradually be reduced based on cash generation as well as EBITDA improvement.
Thank you so much.
Thank you. Our next question is from Alejandro Azar with GBM. Please proceed with your question.
Hi, Armando, Alberto. Good morning, Denise. I have a couple of ones. The first is a follow-up from Alfonso. When you refer to recover the half of the cash needs that you already spent during the H1, Alberto, do you mean on free cash flow, or do you mean working capital needs? If my numbers are correct, you have spent like $300 million in free cash flow and around $180 million in working capital needs. Just to have that figure clear. My second question is on the customer production of Nemak. What would you say is the reason behind that customer production growing at a slower pace than the industry during the H1 of 2023?
My third one is on the rest of the world operations. The margin, the profitability of the region seems historically high, at 13 per unit. Is this the new profitability of this region? That would be my third. The last one is on launching expenses. If you would, help us on. Last year, how much of the launching expenses happened during the H1 of the year, and how that compares to 2023? Because if I'm not mistaken, it seems like last year you had most of your launching expenses in the H2, and this year you're having those in the first one. Those would be my questions. Thank you very much.
Yes, thanks for the questions, Alex. Yes, just to clarify on the comments on free cash flow. As indicated, the growth in cash flow has been associated with the CapEx that we have had, which is higher than normal, due to the, as I indicated, the transformation that we are currently doing on our business. Second, on working capital needs, both because of the traditional cycle that you see a higher need of working capital in the H1 of the year and then recover on the H2, but also because we also have a higher activity and higher volume, so that demands also higher working capital.
We should be seeing a reversal on working capital on one side and improvement on the free cash flow from operations on the H2 of the year. We need still to recover a few of the inflation negotiations with the customers. That should be a positive effect, both on cash as well as on results. We should be, with a combination of all of those, helping us to collect more cash altogether and reduce that cash investment, net cash investment that we have invested in the business so far. Related to your second question on the difference on customer production of our customers versus the industry, I think there is really nothing there to highlight. This responds to the regular schedules that our customers have. They sometimes, depending on how they're launching platforms, move.
They move sometimes a little bit higher, sometimes a little bit lower. There's really nothing there that concerns us or that we have any interest.
Okay.
On the rest of the world, certainly, I think you have their point. I mean, we have had very good profitability this year on our performance, particularly at our operations in South America. Our team there have done a fantastic job to be able to maintain the business at the right performance levels, together with better mix, a little bit of better volumes as well, and also good performance in China. We're seeing overall stability on the regions as well as favorable mix and products. Last but not least, on the launching expenses, as we highlighted, or as I highlighted during my comments earlier, when you have more investments, that means more activity and therefore higher launching expenses.
We're seeing a little bit more expenses on this H1 of the year versus what we saw on the H1 of last year, but that has to do precisely with the amount of activity that we're currently engaged with on these new launches. These are, again, temporary in nature, so those are while we stabilize the production, while we take those programs to the desired volume levels. This year, it was, or this quarter, it was close to $6 million of launching expenses that we experienced.
You, during the H1, you have $6 million.
During the quarter. During this quarter.
During the quarter is $6 million?
Yes.
Last year, how much was the entire year, Alberto? How much would that be for the H1 of 2023?
Yeah. I don't have the exact breakdown for the H1, altogether we had close to between $25 million-$30 million of launching expenses along the year, mostly on the H2.
Okay.
But again, that follows directly the amount of activity on new launches and new platforms that we're currently developing.
Okay, perfect. Thank you.
You're welcome.
Thank you. Our next question comes from Peter Bowley with Bank of America. Please proceed with your question.
Hi, Armando, Alberto, Denise, thank you for the call and the opportunity for a question. My question is, what percentage of customers or contracts are left to conclude the negotiations on inflation that I think you mentioned you're targeting to conclude by Q3, 2023?
Yeah. Yeah, we have made progress, Peter. We still have some offers that were not accepted by us, mainly North America. We're making a little bit better progress in Europe, but we're confident that we will be able, Peter, to close our negotiations during this quarter.
Thank you.
Thank you.
There are no further questions at this time, and I'd like to turn the conference back over to Ms. Reyes for any additional or concluding or web questions.
Thank you, operator. We will now move on to questions from the web. First question comes from Andres Cardona from Citi. "Within the three electric vehicle and structural components, new plants under construction, are you able to deliver on the target of $2 billion in revenue by 2025 for the segment?"
Basically, this year, we are running at the level of about $630 million. At this pace, which is a significant growth, our commitment made was to reach contracts that would yield $2 billion in revenues. That doesn't mean that we will be at $2 billion by 2025, but I think our growth is certainly moving in the right direction. By the way, we are confident that we should achieve the $2 billion of new contracts before 2025. We're very confident. We are now at 86% of our goal that we set, just a couple years ago, and I think that we're very selective in terms of customers, products, and regions in which we would like to participate, especially in the electric mobility.
Second question is also from Andres Cardona from Citi. Andres asks, "Last quarter, you mentioned you are being able to get clients to fund some of the CapEx in the incremental EV and SC segment. What does it mean in terms of ownership of the facilities or the economics of the business? Can you please elaborate about this initiative?"
Well, yeah, I think, as we have mentioned in the past, part of the discussions with our customers have to do with the ability to jointly fund some of the projects that we have going forward. That helps us with the cash needs, also with maintaining a prudent leverage. So far, I think we have had some discussions with customers and already some negotiations to obtain support. That doesn't change by any means, any type of ownership of the facilities or anything. We're full owners of our three sites that Armando just described. That only supports our business cases, the economics of the business cases further.
We have a third question from Andres Cardona from Citi. The question reads, "How much of the benefits of negotiations to transfer labor costs to clients have been done as of Q2, 2023? What was the main driver behind the margin expansion versus Q1 2023?"
Yeah. Well, certainly as we discussed earlier on the call and when we share our guidance, part of this negotiation with the customers this year, different than last year, was that we were including also the effects of labor inflation on our costs, on the negotiations. We have had discussions with the customers on that front, together with the rest of the inflation elements. As Armando highlighted, we have made some progress, particularly in Europe. This is an element which is very important, and we are putting a lot of emphasis on those discussions, and certainly we'll continue to do so as we continue closing those negotiations.
Next question comes from Kamel Bouzidi from Barings. "With your current increasing leverage, do you have any internal leverage target you intend to maintain?"
Yes, related to leverage, we closed this quarter at a level of 2.7 x on a net debt to EBITDA basis. The expectation is, as we discussed before, to reduce that leverage, particularly on the end of the year. The Q3 will still be at a similar level, but at the end of the year, we should be seeing a recovery based on the reversal on the cash flow generation, as well as improvement on EBITDA. Our targets continue to be, to be within the 2 x net debt to EBITDA. We're going to be a little bit higher than that, as of the end of the year because of these high investments, but we should gradually continue improving that leverage going forward.
The next question is also from Kamel Bouzidi from Barings. The question reads, "How do you feel that the pent-up demand would hold up in the event of a potential US or global recession?"
Well, certainly, it's unpredictable, what will happen if a recession comes. What we could tell you is that, we are prepared. We have faced in our history, different cycles, and certainly, if a recession comes, and that would mean lower volumes, we know and we have already developed a playbook for these type of situations, in which we immediately adjust our cost structure to the new market reality. We feel that, and again, in conversations with the economists of not only the US, but also Europe, they see that at least for the next 12-18 months, the economies of the world are strong, and also unemployment rate is very, very low.
I think interest rates are becoming a little bit higher, but in spite of that, we are seeing, at least for our industry, much better volumes than what we have experienced over the last few years. In summary, Nemak is prepared and has already applied different cost reduction activities in our facilities if we see lower volumes.
Our next question comes from Agustin Bonacossa, from PineBridge. Agustin says, "Thanks for the call. I have two questions. What is the amount available of credit lines, committed or uncommitted? The second question is, what should we expect in terms of net leverage by the end of this year?"
Yes, we have a very good and ample source of potential loans with our banks. As you may recall, we have a large portion of our current debt portfolio financed through the bond market. That keeps availability of bank potential loans with our relationship banks. Altogether, we have close to $800 million of between committed and non-committed credit lines available for us to fund our cash needs and our growth. I think the second question was already answered before.
Next question is from Juan Patiño, from SunCapital , regarding leverage too. "Could you detail leverage perspective for the company?"
I think that was already answered, too.
Thank you. Next question, Rodrigo Sganzela from Invex. "Hi, thank you for the opportunity to ask questions. How much of the expected $30 million one-off expenses related to the launch of new products have we seen in 2023?"
As indicated, we have had the impact this quarter of launching expenses in the neighborhood of $6 million. I think this is, again, consistent with the amount of activity that we're currently performing. We should be seeing, depending on the amount of activity in the following years, potentially similar or smaller amounts in terms of launch expense, capital, launching costs. Again, those are very consistent with the activity and also, those are part of the things that we normally have considered on our guidances, to allow for certain room for the proper development of products.
Next question from Jakob Stengel, from Ashmore. "Can you please provide a bridge for the $130 million quarter-over-quarter rise in net debt, given CapEx was only $131 million, and increase in working capital was only $57 million, as mentioned on the call?"
Well, there are other elements that also affect the cash. I mean, you have on one side, taxes, and on the other side, you also have the interest expense. Taxes on the Q2 was also a little bit higher because we paid as of the end of or early April, the taxes associated with the full year closing of 2022 during this year. Given that we had a fairly low tax rate last year, this year, particularly in this quarter, we had a little bit extra tax payments associated with last year's results. The sum of the four elements, working capital, CapEx, interest, which was also a little bit higher due to the higher base rates, and taxes, explain the rise in debt, as highlighted.
We have a second question from Jakob Stengel from Ashmore. Jakob asks, "What drove the increase in SC debt in Q2 2023?"
Yeah, short-term debt increased as that's our main source for funding these cash needs, which are temporary in nature.
Okay, next question is from Declan Hanlon from Santander. "Can you talk about working capital cash uses or sources for this year and for the full year? Please also discuss cash deployment strategies for share buybacks versus reducing net leverage."
Working capital, as we have shared in the past, behaves on a seasonal level during the year. You have high investments in working capital at the end of the Q1, Q2, stays a little bit high on the Q3, gradually reduces by the end of the year. That's a typical working capital cycle that we have during the year, it's associated with higher activity that normally is reduced by the end of the year due to the schedule stoppages for holidays for our customers. Altogether in the year, also, higher volume than we have had, and that's mainly the source of increases. What was the second question, Denise? I think that covered it.
That concludes it. Correct. Our next question is from Mauricio Buitrago, from AM Advisors. "From the negotiations you have already concluded, what were the terms of them? Are you going to ink everything or what can?"
Thanks, Mauricio. Definitely, we have made progress, not only with inflation in energy, but also in labor. As I indicated already, good progress, solid progress in Europe. We're still in negotiations with our main customers in North America. We're confident that we will, with a good solution for both. Certainly, what we're trying to achieve is to index those, especially when we have seen increases in our cost structure. We have shared with our customers, our let's say, expenses that are in quote, related to both energy and other elements.
Next question from Alvaro Hernandez from Intercam. "Are there any risks on the volume regarding the export initiatives of China of e-mobility components?"
We, we are not seeing. Actually, the opposite. We are seeing with China significantly more opportunities going forward. I think a lot of our customers were buying products in North America from China, and we are seeing larger opportunities. We see very solid market in North America. Also, Europe, I think is getting stronger. I think our performance related to volume, we don't see any effects related to the commercial conflict that the US and China are experiencing. I think it's a great opportunity not only for us, but I think for the North America region as well.
We received another question from Mauricio Buitrago from AM Advisors. "Would you please repeat your EBITDA, volume, and CapEx guidance for 2023, please?"
Yes. Our guidance for 2023 was as follows, volume, 41 million equivalent units; revenues, $4.8 billion; EBITDA, $560 million; and CapEx, $490 million. We are not going to change our guidance as we speak. However, we are confident that we not only going to meet, but we will surpass the guidance that we set, especially on the EBITDA and also on our revenue side.
There are no further questions at this time. With that, we conclude today's event. I would just like to take this opportunity to thank everyone for participating. Please feel free to contact us if you have any follow-up questions or comments, and have a good day.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.