Earnings Call: Q2 2021

Aug 5, 2021

Good afternoon, ladies and gentlemen, and thank you for holding. Welcome to the Braskem's Conference Call to discuss the results of the Q2. Today, we have with us Mr. Roberto Simoes, the company's CEO Pedro Trepas, the CFO and Rosanna Abolio, the Investor Relations Director. We would like to inform you that this event is being recorded. And during the presentation, all participants will be in the listen only mode. And during this, we will begin the question and answer session and further instructions will be given. Both the audio and slide show for the presentation are being broadcast simultaneously via webcast and can be accessed through the web at www.bascam.com/rihealth. Please bear in mind that the forward looking statements that may be made during this conference call regarding to the company's business prospects, operating and financial projections and calls are based on the beliefs and assumptions of the company's management as well as on information freely available for the company. These forward looking statements are no guarantees of performance. They involve risks, uncertainties and assumptions as they refer to future events and depend on circumstances that may or may not occur, General economic conditions, industry conditions and other operating factors may affect the company's future results and related results that differ materially from those expressed in the forward looking statements. I would now like to turn the conference over to Rosanna Abbollo, the Investor Relations Director. You may proceed, ma'am. Good afternoon, ladies and gentlemen, and thank you for participating in Braskem's earnings conference call. Today, petrochemical scenario in the quarter. In the Q2 of 2021, petrochemical spreads continue to improve. This pandemic is mainly explained by a healthy global demand in the period and supply constraints in the United States following the U. S. Winter storm in the country's Gulf Coast. In the Q2 of 2021, the company had recurring results of BRL1.8 billion, 198 percent higher than in the Q1 of 2021, representing BRL12.69 billion for common shares and Class A shares For the entire year until the end of the quarter 2021, Braskem had a net profit of BRL9.9 billion. I would like to highlight that in December 2020, the company had accrued losses of BRL4.5 billion. At the end of July 2021, the company reversed the base to a dividend profit of BRL5.4 billion. We go on to the next slide. Slide number 6 shows you the highlights of the Brazilian operation. In the 2nd quarter, the utilization rate of crackers in Brazil was 76%, down 6% to a point vis a vis the Q1 of the year. This lower utilization rate is explained by the scheduled general maintenance at the ABC Petrochemical Complex Sao Paulo in the Brazilian market prices sales decreased in relation to the Q1 of the year due to the normalization of demand in the region but still at healthy levels. On the other hand, exports increased during the quarter. The recurring operating result for Brazil was of around R1.1 billion dollars, results 20% above the Q1 of the year. We go on to the next slide to speak about the latest developments for the tax regime for the chemical industries. The special tax regime known as Rake, which decreases the competitiveness of Brazil's chemical industry by reducing the feed, COFINS tax rate levied on purchases of basic petrochemical feedstock. In March of this year, the federal government proposed to terminate rates through a provisional measure. After the start of the modifications in both houses of Congress, in June, it was passed by the federal government. And this was sanctioned by the federal government and converted into Federal Law 14,083. The law provides vital reductions of the rate in 4 years until the special regime is fully terminated in January of 2025. We will speak about the geological event in Alagoas, the charge on the less percent supervision balance related to the geological event in Alagoas at the end of the second quarter. The balance registered was BRL 7.7 billion and during the quarter, Braskem reversed provisions in the amount of BRL72 1,000,000. The graph on the right presents a disbursement schedule of the total balance of provisions of CNY 7,700,000,000. 58 percent was recorded under current liabilities and 32% under non current liabilities. The company cannot predict with certainty that future developments in respect of this matter or its related expenses and the costs incurred may be different than those currently estimated or provisioned. Financial compensation to the families living in the risk area. The number of families allocated was 13,807, which means 96 percent of families in this area have been relocated, reinforcing the company's non negotiable commitment to allow families to live in safe areas. The number of financial compensation increased by 52% with an acceptance rate of the proposal submitted to mailing of high levels. Regarding the payments made under the scope of the program, about R1.2 billion dollars had been disambursed until the end of the second quarter. Now these amounts were considered since the beginning of the program. Please go on to Slide 10, where we present the main highlights of the United States and European operations. In U. S, the capacity utilization rate rose by 20 percentage points. In Europe, the utilization rate increased due to the rebuilding of inventories and leading the demand in the region. In the United States, our sales volume in the quarter grew by 14% compared to the prior quarter, setting a new quarterly record. It reinforces our leadership in the U. S. Polypropylene market. The segment's recurring operating results in the second quarter was $492,000,000 56 percent higher visavisprevious quarter. In the next slide, we will speak about the highlights of the Mexican operation. In Mexico, the capacity utilization rate stood at 58%, in line with the prior quarter, reflecting the higher supply of ethane by Pemex in June, which was partially offset by the unscheduled shutdown due to isolated instability in power supply through Braskem Aideza. The sales volume for the quarter was 155,000 tonnes, a growth of 15% when compared to the Q1. The segment's recurring operating results in the 2nd quarter was $200,000,000 a growth of 113% when compared to the prior quarter. We go on to the next slide to speak about the company's cash generation. In the quarter, Braskem Chem recorded positive operating cash generation of around BRL1.5 billion. The main positive impacts were the strong recurring operating results and the monetization of Piscofin's cash credits in the quarter. These positive impacts were partially offset by the negative variation in working capital and higher income tax paid. We go on to Slide 13 to speak about the company's progress in reducing the gross debt level. Given its robust cash position and strong cash generation, the company completed several liability management operations in the Q2, totaling $643,000,000 per day reduction. In the first half of the year, Braskem reduced its growth debt by approximately 16%, which represents an amount of $1,300,000,000 Additionally, Braskem also concluded in July of this year additional operations to reduce its gross debt of around $355,000,000 additional $1,000,000 As a result, the total production during the year has obtained $1,700,000,000 At the end of June, we're continue to maintain a very long debt maturity profile and strong liquidity position with a maturity concentrated in the long term. The average debt turn was around 14 years. Now the current liquidity position is sufficient to cover the payment of all obligations ensuring over the next 78 months. It is important to highlight that in May of 2021, the risk rating and the usage rating upgraded of King's outlook to positive, which reflects the company's permanent commitment to maintaining its liquidity position and cost discipline and to reducing its leverage ratio. Now let's go to Slide 15 in which we will talk about corporate leverage. With the objective of being reassigned as an investment grade company, Braskem can continue to reduce its corporate leverage reflecting its solid credit metrics. The leverage ratio was $1,000,000 and in the quarter at 1.1 times. This is a drop of 6 times in the last 12 months. We would like to highlight that the lowest leverage ratio presented by the standing history and the relevant achievement for the company's credit metrics. While working rate to raise that it maintains the robust cash position and a very long debt maturity profile and is committed to efficient capital allocation and cost discipline to be realigned with an investment grade company. Let's go to the next slide now. It is important to highlight on this slide that the main factor is handled by the rating agencies. The company has delivered important progress regarding corporate leverage that can continue to reduce its leverage ratio, which in the Q2 reached its lowest level ever in terms of maintenance of a strong liquidity position. Bergkamp ended the quarter with a global cash position of $2,300,000,000 This is above the minimum established in its financial policy. Barstane also continues to deliver consistent cash generation through the cycle of free cash for BRL2.1 million during Q1 and BRL1.6 billion 2nd Q, it is important to note that the company remains committed to capital allocation and to follow-up on the acquisitions and investments in credit company. Now we will talk about the transfer for that over continuing next. Now the opportunity that is achieving the initiative already launched. Currently, in addition to the recurring annual gains of $147,000,000 in Stage 4, we have been in mid to the Federico da Cruz Initiative in Stage 1, 2 and 3 that could generate recurring annual gains of $293,000,000 total $440,000,000 until 2023. I would like to highlight that the company's previous calls press release. The quality and exposure program will support Acelsra and to reach in 2020 marks a 30% leadership in the economic dimension that achieved important advances in compliance and government practices. In the 2nd quarter, the positive side by the ISO 30,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000, an international standard that is done to the results of the company representing 15% of the volume and 60% contribution margin of the product. On the next slide, we will talk about the petrochemical scenario 2021 and 2022 based on the latest forecast disclosed by independent consulting firm, PE and PVC spreads are expected to remain at a sunk level over the whole year of 2021 and 2022. The highlight is the spread of polyethylene which are expected to remain at levels above the year cycle of the petrochemical industry. On Slide 3, we will talk about some scenarios following the process in the similar way to we expect this to continue as you will see that you saw in the previous slides. External consultancies are projecting sound seeking spreads for 2021 2022, especially in the U. S, S, for which forecasts are falling for spreads to widen the Q3 on this year. On the next slide, you will see the short term perspective. For Brazil, it is expected higher ethylene production and normalization operations in the copper Navy, C Sao Paulo. In terms of sales volume, an increase in total sales volume is expected with the maintenance of the prioritization strategy for service in Brazilian and South American markets. Pre mapped approach will remain at levels above the industry upcycle in contrast to spreads for BP and PBT, which are expected to narrow in the period in the U. S. The outlook for PC production and sales is to remain stable in relation to the second for the PC property spreads in the country remain at some level mainly due to continued growth of the Spanish BP in the region. In Mexico, the capacity utilization rate of PPA production provides an expectation of higher ethane imports from the U. S. S. These sales volume should increase due to higher availability products, but in Mexico should expand in some levels in line with the previous quarter. Now our next slide. In this slide, we can note that Rafi remains as an interesting investment opportunity in the global petrochemical sector of Norbascke and has achieved important advances over the recent period. Its multiple remains discounted compared to its peers. We would like to highlight that Braske is a global company with characteristics similar to its peers in the U. S. With a well diversified feedstock profile, leadership position in its market amongst others. Now on Slide 26 to conclude today's presentation. On the slides, we would like to recap the company's main priorities for 2021. The two main priorities are concluding that processes related to the deal, logical Cibento Nalagolas and reaching an permanent solution for insured reliable ethane supply to Paracem in Ibiza. And we continue to make important advances toward resolving both of these issues. But can also remain highly committed to its financial health and to the efficient allocation of capital with the objective to be reassigned as an investment grade company. Another priority is strengthening both public and reputation. And with innovation and digital transformation, the company's priorities are improving the effectiveness of its innovation action and accelerating its digital transformation. And last but not least, Vercan continues to make progress in implementing the ESP commitment with the goal of becoming an industry reference in ESP. Lastly, we want to reinforce that safety and will always be a key focus on Bracinth's operations with the potential and non negotiable value of our strategy. That concludes today's presentation of Bracinth's results for the Q2. Thank you everyone for your attention. Now let's go to the Q and A session. Ladies and gentlemen, we will now proceed with the Q and A session. The first question from Ricardo Rosendo from JPMorgan. Good afternoon, Hosanna, Roberto and Pedro. The first question refers to your capital allocation. As you showed in the presentation and referring to your cash, you seem to have a very good outlook. You have accumulated profit, which is quite high. Therefore, the natural question that emerges is what should we expect in terms of dividends for the 2nd semester, which is a discussion regarding this. The second question, you referred to the United States and the situation that is happening there, it was an isolated event. If you have any plan and how are you going to work with the other market in reference to the United States? And what are you going to do in terms of arbitrage? Good afternoon. Hey, Carlos. Thank you very much for your questions actually. When it comes to capital allocation, as you mentioned, of course, it is necessary to think about higher dividends and continue on with our leverage policy. Now we have made a decision that states that the payment will be below 2.5%. This will enable us to think about dividends that will be above the minimum rate. And at present, we are at 1.1, which in truth is very low. It is perhaps the lowest in our historical trend. Therefore, it is natural to pay out dividends, something that we have been doing. And I believe that it would be reasonable, if the scenario continues on as it is to once again revise this issue. We have as yet not made a decision. Once again, this is something that we are discussing. And once we come to an opinion, we will disseminate it. Regarding the price of PP, this mismatch comes about for a certain reason. The market there is somewhat weak because of some issues related to the pandemic and to other issues in Asia, for example, we have a greater availability of DP and what we are lacking are containers to extract this from the area. And in the United States, we have this situation where the market is quite balanced and the prices, of course, will reflect this situation. The basis of our market prices, of course, the market is in a situation where the prices have increased and we're, of course, taking the most of the advantage of having higher margins in the United States. The market has become regionalized in terms of prices. Brazil, once again, is still where it was, but the United States and others have taken off. They have become unattached from the market prices. So we see a scenario that while it lasts will be quite positive and I do believe that it will endure until at least the end of the year. If there is a recovery in this, perhaps the price will increase. It depends a great deal on the supply and demand dynamic and it all would depend a great deal on the logistics outflow that will happen in North America. Now you have come up with a provocation that we shouldn't look for markets that are more connected to the United States. Now what we have assessed our sales from Brazil to Mexico, we export from Brazil to other regions And this has been included in our sales and operation method. We include all of the possible regions. And we are advising to see where our exports will go. The difference with the United States, we have no PP contract in Mexico. We have assessed all the possible opportunities. Once again, it's a supply and demand dynamics that has become regionalizing. Of course, we have to focus on the supply part and we do believe that this will continue to exist for some time and when it returns, we truly do not know what will happen. Thank you very much, Pedro. Thank you for the response. The next question from Guido Bedi from Morgan Stanley. Good afternoon and congratulations for your quarterly results. I have two questions. The first referring to cash generation. At the beginning of the year, we had a significant working capital and good cash generation. I would like to better understand what is happening with your consumption of working capital during the year. We still have very high spreads and I think that they have reached a peak during this semester. My second question, I would like to better understand what is it that motivated that very timely shutdown in Mexico? And what is happening with that instability in terms of electrical energy? And when you will have a consumption of the production there. Thank you, Guillermo, for your questions. When it comes to cash generation, as you mentioned, we have had important investments in working capital during this quarter. And of course, this is a fact and Hosanna alluded to this in the presentation. As we have published several times, We have our feedstock management policy and the feedstock that we import, we are able to sustain in the market with terms of up to 160 days. Historically, therefore, we have making the most of these lengths in terms of payments that our suppliers have offered us. What happened is that we are in this situation of a very strong cash generation, perhaps a cash surplus. We have paid out several debts to decrease our exposure. But evidently, if you pay cash, you will have paid a discount. Therefore, we took the decision to look for 5 payments. There was no need to lengthen the payment, and we decided not to mention payment to suppliers. We have reduced the payment term and this had a one off impact on our working capital. The second point that was relevant and perhaps the most relevant of the 3 points is the second and it refers to the price of resins and feedstock or raw material when we carry out our procurement, when we make up our feedstocks, if the price increases, this will be my greater working capital. And the 3rd place, we had a refurbishment of stocks. As you will recall, last year, we had a great deal of sales and the sales have been strong this year as well as last year. As we refer to Brazil, we sold more than 1600 tons per quarter. And in the second quarter, we sold 1,500,000 tons. When we look at this curve, we decreased our sales somewhat and we were able to restore some of our inventories that were somewhat below their normal levels. And this is a modest figure that is included in this calculation. And of course, there could be the possibility of absorbing all of this working capital to our operating cash to avoid any sort of indebtedness. And of course, this is very important and would be a good sign of, Bradskang's sound financial position. These were the relations that need the electric network in the national electric network in Mexico and this cost of failures on our automation and emergency system. It is the industrial automation of our conference. And we had to stop. It was an emergency shutdown because of the lack of power and this triggered the shutdown of the complex BMR since the emergency shutdown though we have the impact of the COVID-nineteen pandemic. And this will generate production lost during the month. I can't remember that it was May or June and there was 18,000 tons of production that were lost. Since June, we have been running daily with no restrictions because of this event. We still have a feedstock with production, but the event was placed in May. Yes, I'll just repeat this information. Therefore, this was an isolated event. The impact was about 15,000 tons in production, but this has already been recovered. Thank you very much. Our next question from Pedro Solari with BTG Pactual. Good afternoon. Follow-up on dividends and capital allocations. I would like to see a number of points that you mentioned that you would pay some fees above the minimum. It would be our leverage before 2 times, 2.5 times. But our strength should come back to normal and this is something that you mentioned and that the leverage will increase at a low level. But I would like to understand that in addition to your leverage target, is there an optimum level of growth that in a little and long run? So what have you prioritized between paying out dividends and paying out debt? Is there some type of breakeven point here? Well, this is a good question, David, because we can discuss our financial strategy and how we see our corporate leverage. You've seen our history, well, our net debt is between $5,000,000,000 $6,000,000,000 We have been growing. The delta project is providing effect as a result of the 18 9 percent of occupation rate. So our margins are very high in the U. S. And very attractive. Now we could even explore the higher net debt that we have that exchange between $5,000,000,000 $6,000,000,000 and we do see this level and now policy cash management that is highly conservative, I will say that a growth that up to $7,500,000,000 give or take would be something reasonable. And I believe that we can correct this with this. There's no problem. You will see that there were moments where we exceeded the €8,000,000,000 But if you see our history of the €7,000,000,000 $7,500,000,000 it's okay and we can coexist with this level. Now we ended the quarter with a gross debt of CNY 6,800,000,000. So it is below the level that I consider reasonable. You paid out CNY 3.50 million in debt. And in July, after we paid the debt, we have a cash position that is slightly above the optimal point for the upswing. So when you see $200,000,000 $300,000,000 of surplus of cash and the increase of our leverage was about $1,000,000 I think this is an excellent structure of capital and this is optimizes our equity. So we do dividends on one side because we want to pay out our shareholders because for 3 years they haven't received dividends. The high time they received their dividend and the optimum capital structure. So we are under so we're not under leveraged. So you can see that there is space here. There's a lot we can do here, lots of maneuvering. Next question from Luis Carvalho, UBS. Roberto, Pedro, Rosana, thank you and congratulations for your results. Two questions. Number 1, after seeing your presentation, Slide 25 drew my attention. And it shows that Braskem, Coimbatim, Coimbatim, being a very important asset in terms of investment. And you showed that and its multiple remains is kind of compared to its peers. So is there something that the management could do to unlock the value perception? And is there something in the sales process to think that the campaign would be sold as a whole or separately? What could you tell us in terms of value perception? My second question is with Ruelang. You discussed this another opportunity, but Ruela is there is a private investment investor. If there is something that could be done jointly, are there any potential opportunity or synergies to carry out joint businesses that could give you some type of additional return? Good afternoon. It's good to talk to you and thank you for your questions. Regarding the peer discount, well, you can just see the figures and the figures show that there is a discount because the fact that the discount was lower in the past 10 years ago, Braskem had a discount, but it was 10%. And Braskem was a company that was percent visiting us, 100% based in NAFTA. We diversified and we went to after other sources with international exposure, exposure to other types of feedstock. So our growth in the past years, in my view, should have diminished this discount and the discount today is 40%. So we believe that this discount is not reasonable. I believe that the market caught up during the Q1 in the beginning of the year. There was a higher discounting of 5x the FSR. Now ERP, what happened was the peers multiple dropped. We continue believing that this count is not justified. Our logic, we follow a solid logic and we are strongly inserted in the petrochemical industry. We do not have never a certain time because this is a highly fixed business that has a strong dimension. So when we see our figures and we compare it to our history, this does not make sense. And perhaps, you know better than I do, there is an upper reception of the investors that was already 150% during the Q1. Is this still going to go up? So perhaps this is what is happening. We're trying to see why we have this distorted value perception as we want to show the market that we are a modern company. We have the best petrochemical producer for the world in terms of state and we are the best in the world with a great potential of growth. In recycling, we're thinking about the future, we're thinking about recycling better than in the stores and platforms. It is challenging and something that provides growth and we are positioning ourselves properly and also renewables. We have a new platform. Nobody has what we have and the potential of growth is overwhelming. So yes, the market what we have to show the market that we have all the reasons and for not having the discount that we have to get regarding a lab, LAM, well, we know a great part of the team that is assuming LAM, many of them used to work here in the past. These are people that are very competent and we are waiting for the right moment to talk to them. But we do believe that it's still not the low end. We have the moment to embark in these conversations, but when we find the right moment, we will sit and talk to them and try to find synergies. But we already have an idea. We have some ideas, but of course, we want to listen to their ideas and other needs, they're peaceful to venture in the Northeastern area. Thank you. Thank you very much for your response. The next question is from Barbara from JPMorgan. Good afternoon and thank you for taking my questions. I know that you have a goal for the final amount so that you can reduce your leverage. Thank you. Hello, Barbara. How are you? To be very frank, we do not have a goal for gross debt. We do have an in house goal for the net debt, but of course, this is not made public. It's simply a reference to help us in our financial management. We have communication with the market when it comes to dividends because this is very important and our figure for leverage all in dollar wise terms, the figures that we gave you are simply a benchmark for you to think about what would be a comfortable level for us, a comfortable limit for us. Thank you. Thank you very much. We have a question that came into the chat from Ben Iverinson from Nova Scotia Bank, who asked that strategically we are interested in investing more in the regional diversification or if there are some chemicals where we would like to have a greater exposure to vis a vis what we have at present. Ben, thank you for the question. I would say the following the regional diversification has been an important part of Bras Chem's strategy. We have invested considerably outside of Brazil in greenfield projects in Mexico, the new PP plant in the U. S. These are our largest investments abroad. We have also invested in Brazil during that period in PBC. In Bahia, they are currently undergoing an expansion in the south of Brazil. We have balanced our investments both in Brazil and outside, but the magnitude, of course, of investments in Brazil was much greater than abroad just because of our diversification logic. We are interested in continuing to follow-up on the Asian market. We have a good platform in the Americas, significant operation in Europe, a sales operation that is greater than the industrial one and concentrated mainly in Holland and Germany, but extending throughout Europe as a whole. And what we have that is proportionately smaller is Asia. We have an office in Singapore and other in India. We have our eye on Asia and we consider a new potential source of investment if we think of the renewable products. Asia is very important for that. And because of this, we're thinking of both of these avenues for growth in renewables and PDS. And Asia is very important when it comes to this product. And along with this, we need to know diversification based on products that we already have, but where we can foresee a significant growth potential, especially in Asia. When we speak about other products, we are always assessing new products that come about and acquisition something novel. The new in house processes of technology and innovation are mainly focused on renewables. We're speaking of new products and this is the type of development that we are seeking, but we are open to partnerships in the regions where we already operate South America and we're open to different products. It will depend on different opportunities. The strategy is not to diversify just to diversify. We want to value what we have now, but we will be looking at what is available. If you look at the more obvious projects that we felt in Brazil, in the United States, this is what is of interest to us. We foresee great growth in new products that will be very much linked to renewables. Our next question comes from Barto from JPMorgan. If you allow me a follow-up please. Your sale of assets from the controlling company, what is the vision that the company has in terms of the sale of assets? If there's any asset that presently would not be deemed strategic that could be for that sales? If you could give us more color on this please. Barbara, thank you once again for another question. I'm going to put that question in the context of what we observed last year. In the 2nd semester of last year, we were at 7.1. And as you know, we were working with all the possible opportunities to reduce our leverage. We included the sale of assets in these possibilities. Now the assets that we understood that in a scenario of deleveraging we could disinvest from, we thought that that equation value and the impact on the company and of course we were not able to come to a conclusion. All of the Braskem assets internally are for sale. It all depends on the size of the check and the pressure that they bring to the table. And well, this is how I would state this. Breast Games does have a commitment with all of our shareholders and we're going to do what will be best for all of them. Now if we receive an amount that we will think that is lower than the check that has been put on the table as a natural part of the business, of course, we will assess this. Now on the other hand, if this doesn't happen, there is no request from anybody to sell assets at present. We're supporting the process that we're thinking of a stake in breast cancer, not selling off parts of breast cancer. At least this is the way that we are thinking and this is the guidance that we have followed Simply to complement this while this discussion is being held with the shareholders at Braskem, we continue to seek for all possible business opportunities to create value to continue to manage our company. This is the greatest value. That is very clear. And I have a last question. A follow-up perhaps on the appropriate level of debt. Obviously, the present day cycle will change going forward, which would be the appropriate debt level if you could remark on this? We are comfortable because if you see our metrics, we know we place a discount or a debt that's out over a 5, our metrics today are fully aligned and we're comfortable with them and we believe that the investment grade and we see our metrics and figures. We are at a level much better level than any investment grade companies. So we believe that this should be recognized by the rating agency. We have been dialoguing with them. But at the end of the line, they're the ones that decide. So we see the figures, we see the facts, we then we analyze different scenarios and how we were able to lower our net debt and our growth rate. We are within the metrics of all of the agencies and even though we're paying out dividends, We are bringing to an end our Q and A session. I would like to give the floor back to the company for your final comments. Well, I would like to thank all the participants for taking part on our earnings results call. And I would like to remind you this was an additional good quarter in all regions. And secondly, we continue with our trajectory to return to the investment grade. I would like to reinforce here that we have had significant deliveries that were presented this afternoon with a reduction of our gross debt representing $1,700,000,000 until the end of June and recording the lowest leveraging of the Braskem history of 1.1 times. And in 12 years, the company leverage will produce 6 fold. And in the future, we will maintain a very sound position with a fully good length and profile for the debt, as you could hear during the question and answer session. Additionally, to this, our commitment with ESG exists and you can see considerable strides in that area. We have changed the board, we have a compliance committee and all of this has had a very positive impact and we do have 2 independent members. And finally, we truly have confidence that the cash generation in the following quarters will be very good. Everything points to this and our operational cash will continue at very comfortable levels. I would like to reiterate our continued commitment towards productivity and competitiveness of all of our operations, the cash generation of our business. And of course, we want to continue to work with all of our shareholders. Once again, we would like to express our thanks,