Earnings Call: Q1 2020

Apr 29, 2020

Good morning. Welcome to Minerva Conference Call for the Q1 2020. We have President, Mr. Fernando Salotti and Edson Tico, CEO and CFO. After the call, we're going to open for Q and A for the investors, and then more instructions will be given. If you're needing assistance, The audio slides will be shown at www.enervacruz.com dotbr. And they will be available for download. Before continuing, I would like to clarify about the perspectives of Minerva. On premises, as well as information, everything will be available. Those circumstances may or may not happen. Investors must understand that there are operation issues that may affect Minerva that would lead to different results. Now we will give the floor to Mr. Fernando Queroz, who is the CEO. He will make his presentation. Mr. Queroz, you have the floor. Good morning, everyone, and thank you for participating at Minerva conference call to discuss the results in this Q1 2020. Before beginning our earnings conference call, I think it's important to talk about the current moment and the global crisis caused by the COVID-nineteen. As we are closely following the guidelines, we're taking all necessary protection measures in accordance to the authorities, giving priority to our more important asset, our employees. We give priority to their health, and we have, therefore, adopted certain measures such as vacation for employees within certain operating units, implementation of working from home for the management department and needs of absence of employees in the risk group. That is people over 55 and women with children under 6, pregnant women and all those who are exposed to contamination risk. We're also checking the temperature of our employees at the entrance of our factories on a daily basis and adopting social and distancing measures in our operating life, for example, in slaughter and deboning activities as well as cafeterias. All this is to guarantee and protect our employees' safety. All these initiatives are strictly in line with the guidelines and protocols issued by authorities. We're also present assisting the native community. For Brazilians, We contributed, donating 50 tons of food, such as beef, meatballs, canned beef. And we're also donating about 20 liters of alcohol gel and approximately 120,000 of ITEs, such as mask gloves, unicorn, cast and protection glasses, moreover, and the donation of $13,000 of drugs and $5,000 in hospital equipment. Minerva also leased $5,000 of ICUs to assist municipal hospitals in locations where we operate, and we will donate more than dollars to the General Hospital of University of Sao Paulo Medical School in Ribeiro, Puerto. Besides, we're also assisting Argentina, Colombia, Paraguay and Uruguay. And Minerva will invest more than BRL 10,000,000 to mitigate the impact of the pandemic and support the communities where our industrial units are located. Everything we have done reinforces our commitment to society, to our employees, to our partners and our clients in the community where we operate in. I would like to emphasize that our Our responsibility is that we're going to continue working with dedication in the production of food to take meals and beef so essential to the health of the communities around the world. We will now talk about the 10/20 results beginning on Slide 2 with a presentation of the main highlights for the quarter. We improved on important operational fronts, always based on efficiency, ethics and sustainable management of our business model. We'll begin with cash flow, a priority for Minerva. Operating cash flow attained BRL 1,700,000,000 in the Q1, totalizing BRL 3,200,000,000 in the 12 months ending March. Free cash flow was positive for the 9th consecutive quarter, attaining BRL 904,600,000 and BRL 1,600,000,000 in the last 12 months. I would like to point to our risk management, which had a fundamental role in obtaining good financial results recorded at the beginning of the year. Consolidated net revenue totaled BRL 4,200,000,000 in 1 first quarter and BRL 17,600,000,000 and in the last 12 months all time high, making the gross revenue breakdown 48% or BRL 2,100,000,000 coming from Brazilian Industry Division around 43%, or which means BRL 1,900,000,000 from Athena Foods division and the remaining 9% or approximately BRL 406,000,000 came from the trading division. In the Q1, Minerva's consolidated exports accounted for 56% of gross revenue, 21% more than the Q1. And in the last 12 months, the share of export decreased 68%, reflecting the strategy focused on exports, especially with greater growth potential and deep demand. The EBITDA totaled BRL382 1,000,000. It's a growth of 16% higher year on year with an EBITDA margin of 9.2 percent over the last 12 months. Our EBITDA totaled BRL 1,800,000,000, another record with an EBITDA margin of 10.3%. Our operational performance in this quarter reflects not only the strength in demand for beef and the good moment for our industry, but also Minerva's excellence in operations management. As the final result, Minerva recorded a net income of BRL 271,000,000 BRL 319,000,000 in the last 12 months. In addition to the strong operational financial performance, we wish to highlight our balance sheet. At the end of the Q1. Our leverage measured by net debt to EBITDA net debt to EBITDA ratio remained stable close to 2.9x, in line with the previous quarter despite the strong depreciation of Brazilian real. In line with our conservative cash management, we closed March with a solid cash position of BRL 6,300,000,000. It is worth mentioning our ongoing liability management, and we repurchased approximately USD 22,000,000 at face value in our 2026 bonds on the secondary market, taking advantage of the best moment for this type of transaction, which considering the market volatility, came to be negotiated right below face value. In the Q1 of we consolidated our position of the leading beef exported in South America with a market share of approximately 20%. This reflects our geographic diversification on the continent, supported by our 15 international offices, which gives us a great competitive advantage and a leading position in global beef efforts. We also maintained our position as a leading beef exporter in Argentina, Paraguay, Colombia and 2nd biggest beef exporter in Brazil and Uruguay. Let's talk about the performance by region in further details. In the Brazilian Industry division, Asia accounted for 42% export revenue, 16 percentage points more than the same period last year. It's also worth noting substantial exports to Russia, which accounted for 14% of the division's exports. In Athena Foods, Asia was also the main destination of exports, 44% of the total, 5 percentage points more than in the 1st Q. Finally, I think it's important to mention that despite the global crisis we are going through, the market outlook remains very positive, and there are several factors that will have an impact in the coming quarters. The first of which is the African swine fever, which has continued to affect pork production in China. The outbreak is not limited to that country and has already spread across Asia and part of Eastern Europe. At the same time, there has been a structural change in consumer habits in Southeast Asia due to increased urbanization, increase in income and middle class along with Western consumer habits. We should also mention the decline in leaf production in Australia, one of our main competitors. And more recently, the problem faced by India on buffalo beef exports, which give us opportunities in several markets in Middle East and Asia. We can add to this, the reduction of the U. S. Beef production due to the COVID-nineteen contamination, we still don't know the effect on global supply and demand landscape. This scenario reflects a greater market opening for South American exporters such as Brazil, Argentina, Uruguay, Paraguay, Colombia. New markets and new authorizations for these countries are already reality, as being the recent opening of the U. S. Market to Brazil. The authorization for Colombian beef to Russia and opening Saudi Arabia to beef exports from Uruguay, Paraguay, Colombia, all in the first Q of this year. Our strategy is to continue maximizing our competitive advantages, investing in innovation, risk management and market intelligence in order to achieve an increasingly efficient commercial and logistical solution, arbitrating end markets and permitting distortions in times of volatility that these become opportunities. I would also like to highlight the competitive advantage in sustainability practices and unlocking opportunities in markets that value environmental protections, animal health and social practices, distancing us from the main competitors maximizing business opportunities. I will now give the floor to Edson, who will discuss Minerva's operating and financial highlights in further detail. Thank you, Fernando. I will begin on Slide 4. We will begin with our operational performance. In the first Q, the Brazilian Industry division accounted for 48% of gross revenue, while Latinas, who brought 43%, and the trading division was remaining 9%. This quarter, productivity dropped slightly due to preventive measures related to COVID-nineteen. With this, capacity utilization rate remained at around 70% in the Brazilian division, approximately 73% in the same of food. As a result, the company's consolidated capacity utilization rate was 71%. And so we've announced the great exposure of Minerva's exports to regions with strong potential demand, such as Asia. Fernando mentioned earlier that we direct most of our exports to Asia. And we this accounts for 34% of total exports in the quarter led by China, which alone accounted for 26% of the total. In the 12 months ending May ending March, Asia was a destination of 43% of total exports, with China alone accounting for 35%. I will now go to Slide 5. On this slide, we can see the net revenue totaled BRL 4,200,000,000 in the 1st Q, up to 12% in the 1st Q, higher than 12% over the Q1 last year. And LTM LTM 1stq 'twenty net revenue amounted to BRL17.6 billion, BRL 70% higher year on year. So our EBITDA margin stood at 9.2%. In the last 12 months, EBITDA totaled BRL 1,800,000,000, a new 12 month period record with an EBITDA margin of 10.3%. Now I will move to the next slide about financial leverage. Our net leverage measured by the net debt to LPN EBITDA ratio was around 2.99x despite depreciation of the dollar by approximately 30% in the period. Now as we mentioned in the last conference call, we used about BRL 1,000,000,000 to raise through the follow on offering concluded in January to reduce our debt. So that our net debt totaled BRL5.4 billion at the end of March, maintaining leverage below 3x. I would like to stress that we still have around BRL779 1,000,000 to reinforce the company's cash position by the end of 2021. This amount refers to the warrants granted in the private capital increase in 2018, which should be exercised by the end of 2021. Going on to the next slide, I will talk about the net result and operating cash flow. Slide 7. The company recorded net results after taxes of BRL 271 1,000,000 in the 1st Q. This result reflects not only Minerva's operational excellency but also our solid risk management model, especially in financial risks, which played an essential role in the results of the Q3, essential to protect our balance sheet and also to keep our leverage below 3 times. In the last 12 months in March, net income totaled BRL 319 1,000,000. Moving on to cash generation. Operating cash flow reached BRL 1,700,000,000 in 1Q, which approximately is BRL 1,200,000,000 came from net income adjustment and BRL 246,000,000 came from positive working capital variation. In the Q1, the impact on working capital was other payables in quotations, which includes advances from clients, sub items. This is not new. We always mention that the performance of this line is due to our credit policy and the requirement of early payment for the invoices of specific markets. So we have this in dollar terms, the real depreciation helped this amount to increase a lot. Due to our investment pursuit to improve the working capital metrics, we're able to return around €630,000,000 to the operations, resulting in operating cash generation of around BRL3.2 billion in the last 12 months. We will now move on to Slide 8 To discuss the company's priorities, free cash flow, Slide 8. In 1Q, recurring fleet free cash flow was positive for the 9th consecutive party with CapEx a quarter at BRL904.6 million, including BRL615 million from foreign exchange hedge results, EBITDA before nonrecurring items totaled BRL 375,000,000 while investments stood at BRL96 1,000,000. This quarter, we had an additional BRL 35,000,000 in CapEx, which was retained from previous quarters. So in the coming quarters, investments should return to historical level of BRL 550,000,000 to BRL 60,000,000 per quarter. The cash financial result, excluding hedge results, was negative by BRL 244,000,000 working capital, returned to BRL 248 1,000,000. As I have already said, the effect of nonrecurring effect is BRL 7 1,000,000 in the quarter, and we reached recurring free cash flow of BRL290,000,000 As a result of the FX rate volatility and benefit of our hedge policy, the hedge result on a cash basis was positive by BRL 650,000,000 giving us free cash flow of BRL 905,000,000 in the first quarter. On the same basis, free cash flow reached BRL 1,600,000,000 in the last 12 months, considering EBITDA of BRL 1,800,000,000, investments in maintenance and expansion of BRL280,000,000 and cash financial results, already including FX head result and BRL538 1,000,000 negative as the work and the working capital variation was positive by BRL630 1,000,000 combined with the impact of BRL555 1,000,000 in nonrecurring items. This reflects Minerva's strong financial performance in this period and the free cash flow growth came to BRL 1,600,000,000. Slide 9. I will talk about the net debt bridge. By the end of December 2019, our net debt totaled about BRL6 1,000,000,000. In January, we completed the follow on offering, which raised net profits of around BRL 1,000,000,000 with the purpose of reducing our debt. In addition, free cash flow totaled BRL 905,000,000 BRL 6,900,000 from nonrecurring items. And as I mentioned, BRL 7,000,000 in nonrecurring items that I explained previously, expenses to combat coronavirus pandemic impact. We were also impacted by the mark to market of hedging instruments noncash totaling BRL536 1,000,000 and reducing our debt. And in the elevation impacted to increase the debt, we now have everything is indexed in a total in this quarter, BRL 1,800,000,000. If we add everything that contributes to reduce plus the FX and our debt, our net and in BRL5.4 billion, that's BRL600 million reduction in the Q1. Once more, we reaffirm, we ratify the management's commitment to reduce Ninera's debt to gradually improve our capital structure. Our hedge policy is still in place, a protection between 50 to 60 of our long term exposure. Thus, we continue to maintain our balance sheet well protected, And we feel very comfortable, very protected. To wrap up, let's go to the final slide to talk about our debt structure. Slide 10, please. As I mentioned earlier, our leverage measured by the net debt to LTM EBITDA ratio closed. It was below 3 times. And at the end of March 2020, the company's cash position stood at 6,300,000,000 an all time high, giving us confidence to face this time of high volatility. Now as to the debt profile, currently 78% of our debt is exposed to the dollar with a duration of around 5 years. I would like to mention again that our balance sheet hedging policy requires a hedging of at least 50% of our long term exposure, And this has proved to be extremely efficient to protect us against the exchange rate fluctuations. Nowadays, this number is around 53%. As promised at the end of March, we've reduced our short term debt to 18% of total debt to so it's now 18%. And this we use proceeds from the follow on and to amortize debt due in 2020. Well, the last point that I wish to comment on this slide was an operation of bond buyback on the secondary market. And in March, approximately US22 $1,000,000 paying around 85% of the pay stub. The idea is to cancel these bonds. But meanwhile, we are carrying these bonds on our cash. This obviously brings results to the company. The cancellation will be at par value, and the most important is that this is an instrument which will allow to invest our own cash in a good rate of return and has only occurred due to the stressed market conditions in March. Therefore, having a good cash position, this also allows us to take advantage of market opportunities and to improve our capital structure. We have already used this instrument several times over the last 10, 12 years, having a good cash position always allows us to take the opportunity of volatility situation in the market. Well, this is in Philip's presentation. And we will now begin the Q and A session. Thank you for your attention. Operator? Ladies and gentlemen, we will now begin the Q and A session for analysts and investors. Before beginning the Q and A, I would like to mention that questions in English should only be made via webcast. I would like to hand the floor to Mr. Fernando and the first question. Well, thank you. I have two questions. The first one is, if you could mention the going forward performance of the domestic market. We saw in the Q1, but there's a discussion, there's an acceleration or not of the market because of the crisis. How do you see the performance of this segment? Second question, looking at the U. S, we see lots of plants are being closed down. It's a very volatile scenario. And are focusing we see more exports of Brazil to the U. S. A. Now I'll first start with the second question. The U. S. Undoubtedly is a market which is very has strong liquidity and reduction of the potters. Is going to have an effect. We are shipping from Argentina, Uruguay and Brazil. And the U. S. Is a market that will need to import beef, not because of the slow slaughter there, but also due to the decrease of Australian exports. Australia is a great exporter of free range cattle, And this market is now open very strongly to us. And there are also niche markets, like using organic beef from Uruguay. And we also serve the American market from Uruguay, Paraguay and Brazil. In the domestic market, what we see is a change in the channel. The channel is no longer the food. And it has migrated to retail, from wholesale to retail. It has migrated with an increase of products that are more simple, basically coming from the lower cost beef from the front of the capital. And this has reduced the demand from the more expensive beef. So the spread between the low cost beef and the high cost beef that we operate in our beef test, it was never so narrow. And we believe it's going to continue very narrow. Now for the domestic market, we think that there's going to be a change in habits. And we will continue with the lower cost products of beef. There's an increase in unemployment and a decrease in income. So it's natural to have this downtrade. So we're going to focus more and more on exports, but we're going to keep our commitment with the domestic market, 60,000 customers that we have in retail. Thiago from DPV would like to ask a question. Good morning, investors and Fernando. My question is regarding the trading income. This is something in the last quarters, it participated it had a relevant participation in the income, the revenue of the company. So what is the level of revenue do you think you can generate in this period of the Q1? Do you think it's reasonable? Or do you think we should think of other income for this division? So my question is, do you have any visibility about this? And the follow-up is regarding the exchange hedge. Edison mentioned that it's 53% long term exposure hedge today. I just want to confirm if that is what I heard so that I can understand the hedging level. And is this going to be a big variation? Thiago, and thank you for your question. About the trading, I have already said in other calls that this is growth less or does not grow, it depends because it has a feature, which is very opportunistic. For example, for Life Capital, it depends on the situation. The energy trading, we now have set up an operator to deal with this, which is so important at the moment. This is a division that does not grow very much. And of course, it's natural that we're going to lose participation in the share because the 2 divisions, which is Brazil and Argentina, could continue growing and growing strong in the last quarter. So the trading went from 15% to 10% in share. And honestly, I think that it will be more or less around this level. We do not see this division gaining any relevance due to the opportunistic aspects that it has in its activities. Regarding the FX hedge, I have also explained this and I said this in a newspaper interview. We changed our hedge position in June 2018 because there was a structural change in macroeconomy in Brazil. Until 2018, we were discussing sort of in a circumstance in our board meetings what was going to be the protection that we should have as compared to the scenario and the risk asymmetries that we saw. And this happened due to a because the cost of hedging in Brazil was very high. Until 2018, we had a cost of 12% a year. Hedging all the FX debt at 12% with our cost at the time, our debt in dollars was 8% to 9%. This was implying paying the cost of 3rd party capital. And the ROIC was about 18 to 20. So the best situation, we would have a return, which would be 0. So this was not an option to hedge all of this debt. This is why we have this risk return approach. We want to protect the balance sheet in the situations that we saw very important asymmetry. As of 2018, there was a drop of domestic interest rates, and especially in the United States as well, the interest rate dropped. So the hedge costs went from 12 percent to 3% or 4%, which is far more reasonable. And also ours dropped from to 6.5%. So we had started around 10%. Our ROIC also improved. So it made a lot of sense in risk reduction to have the balance sheet protected. You might say, well, why not 100%? Well, for simple reasons. Our company is mostly an export company. I have assets in dollars in my balance sheet, And I have future revenues in dollars as well due to imports. So if I hedge all of my debt, I would be putting the company in a situation all bought in dollar. And we want to protect. We want to bring this exposure close to 0 and not to keep speculating with the company if it's a put or call, if it's a buying or selling situation. So we set up a we the administration, we set up the matrix, and it determines minimum level of hedge to protect the debt long term debt in dollar. And this matrix has to take into account three factors: the cost of the hedge, the level of net leverage of the company and the total exposure in dollar of the dollar debt in the company. Nowadays, we have a leverage below 3x. We have a hedge cost around 4%. And our exposure of long term debt is less than $2,000,000,000 So this shows that there's an indication that we have to have 50% hedged. We may have a difference of 10%, so something between 15%, 60%. Currently, we're 53%, but the policy is obliges us to have at least 50%. If you look at our balance sheet of 2019, December 31, if you look at the assets in dollars, that is my cash in dollars, receivables in dollars plus the MBS that I bought the long term and all the exchange liability of the company, we were slightly in a spot position. So we defined our intention. We wanted the company to be more neutral regarding the balance sheet. Of course, this gives us an advantage of the operational cash flow, and it improves the exchange devaluation. So this is an explanation of what we have now, which is 60%. But for the long term, it is always above 50%. Santander Bank has a question. Fernando, good morning. Well, congratulations for all your hard work and all your social work that you're doing. Everybody is in a very critical situation. And it's wonderful to see you doing very positive things in the needy community. My question is that there is an expectation that in May, we're going to start operating, others have shown. Do you have orders from food service for this reopening of the operation? This is the first question. The second question is regarding Argentina. The official exchange rate is being maintained artificially at a very low rate. But how do we deal with the cash situation in this situation? Is it possible to have some resources out of Argentina? These are my two questions. Thank you. Marcel, thank you for your question. Yes, we have done hard work. We have helping a lot of needy communities, donating food and furniture, a basket of staple food, equipment for kids and for doctors and hospitals, we are working hardly. And this is part of our responsibility. I would like to highlight the work we have with our collaborators. Since we have revamped all the plants, We have revamped all our operations so that we use all the IPEs. We use IPEs everywhere because we want to protect our workers and protect the community. About the food service, we continue to supply to food service. It's at a very lower volume. We have less deliveries. But what we have done is we have sort of mapped all our customers. We have given them the necessary conditions, extended the payment terms, longer payment terms for payments. We have given them support in this period. And we have even informed what how the state and the federal government, how their what their guidelines are. In Argentina, we are some biological assets, especially cattle because it has a dollar value, so we can have a hedge. I just want to add, says Edson. In Argentina, what we're doing is we agree that the exchange rate they say, the official one, is very far from the real situation. What we hope what we see is what's going to happen is going to be a very big devaluation and come closer to the gray market. So we're going to sort of dollarize those assets. We've been doing this for some time. We're going to buy cattle and other assets and other commodities as well, which are dollarized, and they are used directly in our operations. Besides this, we are giving priority to investments that have a quick return so that we can accelerate our cash flow in assets that gives us a fast return. And according to the continuing regulation, we're using all the possible tools to keep all the dollarized cash or in dollars out of the country, out of Argentina. So according to the law, according to everything that is officially allowed, we have been doing everything we can to protect the cash that we have generated in that country. Well, thank you for your answer. Luciana from the Bank of Brazil would like to ask a question. Good morning. Fernando at Headstone. My question About Brazil, I think there has been a big impact of the pandemic. Could you give us a breakdown of the markets that have been most affected, China, Middle East. And what do you think is the trend for the future? And the foreign market, could you comment about the pricing? What do you see going forward? Answering this question about volume, we took measures in all the plants to match to our adapter sales to the current situation. So as I said in the previous question, we are decreasing our speed, and we are increasing our IPE. We're giving vacation. We're keeping everybody working from home. We are taking all the necessary health measures. And women that have children under 60 years old will remain have remained at home. So there is a reduction in our slaughter. And we have done this to protect our employees. So this is what was done. And this is the justification of the reduction of the volume. Now we are slowly, gradually coming back but without decreasing the focus of our protection to our employees. So the rate of our capacity is a little bit lower than in the past. Now regarding exports, exports have now started when the countries have opened up their economy. So there's a very clear relation. When China started to get out of the lockdown, we saw China coming back. And it's now practically normal. This is in China. In Europe, is Europe is the region that most suffers. And Scandinavia, Germany and the North of Europe, especially, they had a more stable position. So exports are growing according to the lockdown relaxing. And it's what we said here in Brazil, a trade down with a head lower and a change in channels for the food service to retail. So this movement we see in Brazil is exactly the same what we saw in China and in Europe and what is happening in the U. S. This is a standard of the nature of condos, and we are improving in terms of products and how to do and do what would be necessary from the food market to the retail market. Thank you. Good morning. Thank you for your question. I have 2 questions. One is more a follow-up about exports. Due to these exports, we will have more allocation for because Brazil, in the retail, with a mix which is a little bit worse than foodservice, so a bigger allocation for exports. Now my second question is regarding working capital. We see that there we can imagine that during the year, we're going to have a similar pattern. Do you think there's going to be working capital along these lines? Well, the answer to the first question is yes. We take these decisions weekly. We have a beef desk for each origin. And during the daily beef test meeting, the breakdown of we decide whether we're going to sell in the domestic market or export, including we decide to where we're going to send each kind of beef cuts. So the profitability in exports will, if they continue improving. Some here, if it's going to improve a lot, it will stay here. Otherwise, we will export more. So we can we already have 68%, but we can increase. The second question about working capital. The working capital is as we export more, you have more need of cash because cash for export is longer. But depending on the market that we increase and the credit risk, our credit policy can go from 10% to 100%, depends on the customer. Depending on the market and customers, we can minimize the working capital with a prepayment account. Now the advance sort of the there's also the exchange rate. Everything is paid and maintained in U. S. Dollar. So I have the counterpart, which is the increase of its advancements given to the customers. Thank you. I would like to know about school services in China. I would like to know if it has already picked up again. I'm sorry. I cannot go sound a little bit bad for this question. Well, I'll start answering your second question. We have protocol. COVID-nineteen is a reality. It is here to stay. And probably, we're going to have employees that will be infected. We already have models to minimize, but we have mapped employees who are married to doctors, nurses. We have all this mapped so that we can have a risk management of all our employees. So yes, we are prepared for a greater contamination in all the plants. Regarding food service in China, it is picking up. It's one of it is the industry that is most affected. It's one of the industries that's going to take more time to go back to normal. But yes, we are going back. So all our chains of food service and international chains and global chains, we have a thermometer. We're very close to everything that is happening. So there is a case of food market, but it's not sort of full blast as it was in the past. I think this will take more than a year to go back to what the situation we had before this pandemic. We have three questions from webcast. One is from Monica. I will translate it to Portuguese. And I will what is the percentage of income costs in CapEx are in dollars? Well, the income is around 68% of the cost directly in dollar. With maritime freight, which is something less than 4%. And regarding CapEx, I would say that onethree, around 30% of CapEx can be considered in dollars. The second question is from Nathalie from the Trades Agricole. She says, could you give me more details about positive part of the hedge? Well, we stand in our release and the result was BRL 851,000,000, one part of noncash. And it comes from the derivatives that we have in our balance sheet. At the end of 2019, we had USD 850,000,000 in MTS when it depreciated 1.10 and we pay 1% of carry in a quarterly way. The next question is from Roger Bert Jones from Insight Investors. What is the price that you did the buyback of $21,000,000 Well, we made several purchases in the market. We bought from 82 to 89, our average was above 85 of the value. As there are no further questions, I will now give the floor to Mr. Fernando Queirot for his closing remarks. Well, before Fernando makes his comments and his comments, I would like to make an announcement. Emena was confirmed at the bovestra rate as of May with a weight of 0.22% in the Bovespa index. So this is a big success for us due to the liquidity that it brings for our shares. I will now give the floor to Fernando for his final remarks. Well, I would like to congratulate everyone of the Minerva team. Now this index is one of the something very new. This is the fruit of all our work and the increase of capital, making the company more liquid. I would like to close this teleconference. I would like to thank all the Minerva team for the performance in 2020. It was a very special year, and this is a special quarter. I would like to thank you all for your dedication. And I'm very proud to know that our team has disciplined And with new habits and with new skills, we kept all of us working with the same level of dedication and with an extremely, extreme flexibility to deal with all the problems. It's one more challenge that we're facing together and the way that we have always led our business with grit and determination, without fear of facing adversity. This is our DNA. We are alert to the different opportunities in the market of beef, and we continue going ahead restating our commitment with discipline and capital with practice using ethics and sustainability. And we believe this is the best way in the long term. I'd like to thank all at Minerva. I'd like to thank all of you for your interest in Minerva, and we are available for any questions or explanations. Thank you very much for your time. The conference call is now closed. We thank you all for your participation, and have a safe and safe.