Earnings Call: Q2 2018

Jul 26, 2018

Morning, ladies and gentlemen. Welcome to Vale's Conference Call to discuss your Q 'eighteen results. At this time, all participants are now in listen only mode. As a reminder, this conference is being recorded and the recording will be available on the company's website at walley.com at the investor.com. This conference call and the live presentation are being transmitted via Internet as well also through the company's website. Before proceeding, I mentioned that solidification statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could be from maturities from that anticipated in any forward looking comments as a result of macroeconomic conditions, market risks and other factors. With us today are Mr. Fabio Schreckman, President and CEO Mr. Lucia Nuncieni Turiz, CFO Mr. Peter Ocindo, Executive Director, Firs Minerals and Co Mr. Edouard Bogota O'Neill, Executive Director, Base Metals Mr. Luis Edouard Bogota, Executive Director, Sustainability and Institutional Relations Mr. Alexandre Pereira, Executive Director, Personnel Support Mr. Alexandre Dombrosio, General Counsel and Ms. Marina Cripal, Director of People. First, Mr. Fabio Schettmann will proceed to the presentation. And after that, we will open for questions and answers. It is now my pleasure to turn the call over to Mr. Fotis Rechtman. Sir, you may now begin. Thank you. Good morning to all. It is a pleasure to have you in this call in this quarter call. This quarter, it's actually a very special one for us in management of result in the quarter. But the quality of these results was very good, as I'm going to explain in the 2 things. And it's very important for us to see several aspects of our strategy even with the reduction in the item of price that went down $9 on average in 20% the last quarter. And in spite of the truckers price, right, that we need to stop the whole country for several days. And while in these circumstances, we're able to beat records in production of Alunort and sales of Alunort. And of course, showing our great flexibility. Meanwhile, the reason why we overcome price reduction in the plant is because the price realization of value has increased by $7 this quarter. I would like to emphasize as well the fact that we are thinking cost, we are thinking part in long term and we are thinking short term and long term as well. Long term industry, take advice on is in technologies. We achieved the investment we are looking for so it can be a more or so if not yet, by the end of the quarter. And this has given us the opportunity to start a number of movements, that demonstrate very clearly how value is affecting our future. So first, we transform a large investment potential large investment in Brazil. We saw a highly profitable one through a training of products. And this implies the fact that we are open we are going to pay a little more than $2,000,000,000 next September regarding the results of this semester. That are a very good achievement for the company. And finally, representing the trust of the company will remain performing and delivering We are announcing a buyback program of $1,000,000,000 that represents our decision to invest in cost of the company that we will work for, the best assets that the company knows and that we can buy while it is better premium in the market. So this is a very basic summary Good morning, everyone. I would like to start addressing our Q1 cash costs. We saw the very steep depreciation of the Brazilian real in the quarter. And one would expect given the exposure of value to the Brazilian real, Q1 cash cost should come down should have come down by about $1 per ton. And why it doesn't happen. Core factors are nonrecurring in the Q2 and should not be present in the Q3. And in addition to the volume dilution, that underpins our forecast that we are going to be substantially, displaceably the lower $13,000,000 for turning the Q4 already. Talking about these four factors. 2 of them are directly related to the truck driver strike that Mr. Joaquin mentioned. $0.30 a ton has a direct effect of increasing costs because of the way we dealt with the strikes. And with our things that we made at increased costs. Another 30% per ton cost because of the lack of feed of the reproduction pellets in our pelletizing plant, so we have to reschedule some of these ships, and we paid the mortgage for that. The lack of feed came from the lack of inputs for our profit expense, which could not produce then the necessary fee and the necessary quality to feed our direct reduction capacity. So the merge costs about $0.30 to come. Then there are maintenance costs, which are typical of the 2nd quarter, which is the quarter in which we prepare Vale's operations for the tremendous growth in volumes that usually happen in the third and fourth quarter. And there's a $0.30 increase in maintenance costs, which should come down as well. And finally, now that we have more inventories along the chain, it takes longer for reduced production costs to flow through copper goods sold. That's another $0.30 per ton or carryover from the higher costs of the first quarter towards the Q2. In the Q3, in the absence of all of these effects, cost should be because of this. Dollars have gone lower and because of volume dilution that are reduced of 9% to 10% in TV volumes over the Q3, another dollar per ton at least reduced. And then we're seeing the exchange rate continue to provide today as of today, the exchange rate is higher than the average for the 2nd period. Weight metal costs and coal, certainly, you have the opportunity to discuss with my colleagues. So let me jump to expenses. I always talk about the pre operating expenses that came this quarter at $67,000,000 And my point here is that we should be approaching 0 very soon, by the end of the year because F-seventy pre operating expenses should come down to 0. Pallet preoperating expenses should come down to 0 given the resource of our kind of plants. The 3 type plants came back in 2018. And also, the Ballana operations had maintenance cost because of the COVID-nineteen damage, and now it's coming back as well. So this is an expense line that should come to 0. R and D expenses increased. That is expected from our Q1. However, we'd like to understand the quality of the R and D expenses. Part of it goes towards the transformation program, which will bring results very soon. And part of it is exploration expenditure, especially in the Carrization region, especially to generate to accelerate the growth options in the region. So this is still bringing good news also soon. Financial expenses also compared to a year ago, decreased in about 40% due to the side effect of the reduction in debt And obviously, we also expect COVID expenses to come down substantially over the next quarter that we will require more debt. I'm sure you noticed also investments coming at a very low number, $705,000,000 This shows our commitment to capital discipline. Obviously, it is going to go up, especially sustaining investment given the approval of for a great award of demand expansion. But this is a testimony to our commitment, and we should look forward over the next few years to very well be paying capital expenditures. Finally, on cash flow. Conversion of rebizan to cash was very good without any detractors. There was $200,000,000 equivalent resulting in inventories, as you saw given the sales lower than production, nothing remarkable except the new conversion. Net debt, significant decrease in the Q3. We are expecting a smaller decrease because most of the cash flow generated in the Q4 will be funding the dividend payment in September, but still we will approach even more for $10,000,000 net indebtedness. And if prices stay with the dollar, we should then and depending on the how the buyback grows, we should pierce a $10,000,000,000 target in the 4th quarter. And therefore, we will be getting discussions of what to do with these additional assets cash. The dividend we are declaring $2,450,000 represents 53% of underlying earnings, and this is what we expected. So although we had a forward constraint from EBITDA, our expectation of this is going to be the range of income pay operation going forward. And with that, we should jump into Q and A straight forward. Thank you. Our first question comes from Mr. Carlos De Alba with Morgan Stanley. Good afternoon, everyone. Thank you for taking the question and congrats on the very strong dividend. And developments for the operation to come back. Developments for the operation to come back and start producing? And also particularly, if there is any advantage any progress on the conversation with DSP to potentially one of the 2 companies coming the sole owner of Sao Marco. And with the security and the value of the how would the consolidation of Samarco's rate affect the €10,000,000,000 net debt target and the possibility to pay more dividends in next year? And then the second question has to do with the increase in cost that we saw in B&C. Could you comment a little bit on what you should expect in the remaining of the year and then start on 'nineteen? The data operation was had been delivering quite, I think, performance with a positive change. It seems to have been a hiccup last quarter. But I just would like to see if it is something relatively temporary or we should happen very fast for every actions against the company and the shareholders of the company. That doesn't mean to apply So we are now more than ever, 154,000 in bringing Sanofi back on stream. For the stop the return of Samarasin. And even if we can win a deal regarding BHP and Vale, The purpose is solely on the benefit that we can install. That's the way of a business opportunity and more a social organization that we are taking into consideration together with BHP. Of the industry has dipped here. We are not paying for operating this program. This is a much better situation than we've done before. Nevertheless, the fact remains where the issues and operations tend to be stabilized. And it is the most central corporation that value owns. So far, the season what to do and when to do is not hitting that. So we are looking for auction basically because everybody knows that we have we have to continue with the situation in Nava, Our next question comes from Thiago Lofiego with Bradesco Just one follow-up question from the Portuguese call. I have to do the capitalization issue. When should we expect probably to initiate a new growth cycle even from more NABIC demand? We understand the company is really focusing on dividends right now. The net debt level is close to the target of $10,000,000 But just looking 2, 3 years, 4 years out, when should these cost policies start to lessen any growth projects again? You guys have mentioned about potential projects in copper, potentially energy, logistics in Brazil. So what's the mindset of the company regarding those at this point? Thank you. According to this policy. It doesn't mean that if we what we do with the additional will be made in any given moment concerning alternatives. We announced investment in budget. Why? Because we think that the strong investment there, such that we are certainly going to create value such a holder. That is not Actually, we have a dividend policy, and we are going to use the excess cash either to distribute more or in buyback or in process, if any, and if Our next question comes from John Brand with HSBC. Congratulations on the results. I first wanted to ask about the freight rates. There's some new legislation coming in, in 2020 that will require lower sulfur content. I know you, to some extent, mitigated that with the new freight contracts that you had in the results today. I'm just wondering how exposed you are to this, the current fleet of vessels. Is this something that is still an issue? And what steps you could take to mitigate it? And then secondly, for Luciano, I'm just wondering if there's any more to do on the liability management side on how we should think about interest expenses. Obviously, that's going to come down in the quarter or 2 as you pay down rent debt. Bob, is there anything left to do on the refinancing side of other liability management options that you're considering, perhaps buying factor, the state and MBR or on the interest? Thank you. John, thanks for the questions. Peter, it's Peter. So as you pointed out, this is something important structurally shift coming into January 2020, the IMO. And how is that going to progress if we explore progress in order to progressively deploy less on the low sulfur ore because we don't know how fast the refinery is going to react to this new demand. But as a rule of in a nutshell, you can work with the following equation. Our there will be an increase in cost, let's say, the low salt power costs 200,000,000,000 for the spread, if you should believe in that. And the average rate cost you have today is roughly the same if you take into account the effect of the average freight rate in 2023 because what we are going to do, the scrubbers will reduce this delta, this to get to the low sulfur in $1.8 The new Guariva Max coming with the 3 generation we just announced will also reduce it in 1 hour. And the Guarivamax 2nd generation, which is coming on stream now, we already have 7 in the fleet, is also reduced reducing 1 more. So all this together, the scrubbers, the Guilhermax, the 3rd generation and the 2nd generation Guilhermax coming in, we'll concentrate this increase in the spread between the oil categories. It provides it is always the worst case. Of course, the refinery is related and the spread numbers, then we will be much better off. John, on liability management, we continue to look into to do liability management. If you look at the taking of cash flow, you see that we've actually retired $2,600,000,000 in debt this quarter, but we issued another $700,000,000 in debt. Some of the capital providers now are coming to us with very cheap and low attractive rates. So we continue to extend the duration of our debt. Some of these are that we made or replacing others that will mature in the short term. So yes, we will continue to do that exercise. We continue to have large the cost more than they should given the current financial position of life. And as regards NBR, it is one of the many uncertainties that we have with our capital and we really compare this to other alternatives when you have in order to see make a decision on the Our next question comes from Alex Hacking with Citi. Hi. Good afternoon, and thank you for the questions. First, I just wanted to follow-up on the freight booster. I just wanted to clarify the new ships with 62,000,000 ton of capacity, will that be incremental freight capacity for Vale? Or that will be replacing some of the long term contracts that we're rolling off? And then my second question is just broader to do a capital allocation. Could you maybe discuss the framework on your deciding capital return on buyback versus the land? Alex, no, yes, you're right. It's the 3rd generation we just announced the 7 new ships, which we are calling data marks, 325 that rate. That's new capacity coming. And we will be taking, of course, some older contracts or to treat some trade sites. We have the large or carriers and based on It should be just to clarify your second question regarding dividends against Sorry, yes. The question is how are you if you want to when you return capital next year above and beyond the basic policy, how will you decide between buybacks and dividends? What's the framework for that decision? That's a good question. Can I explain how we reach the decision to pay dividends according to quality and have an additional QA by then? And the reason in this moment is basically the following. We have just announced this new policy Therefore, we started to be together in this moment, not to add more dividends, but we said to give it back to shareholders, to add buyback that it is equally as the benefit of the company. And more importantly, it gives a very good time of how the management see the future because we are very positive in the return on the investment that we are going to make in this buyback. We are seeing what is going to happen in the next year, but this is the flexibility that we are going to hold. It will depend in evaluating the situation in many of the months. We are going to analyze until we achieve the best for the company to be able to pay more dividends than the policy? Or should we make more to buybacks again? Our next question comes from Grant Spohr with Macquarie. Good afternoon, gentlemen. Thank you for my questions and congratulations on the good results. I have two questions, please. The first one is regarding the coal division. Firstly, can you just give us an outline as to to how you see the gas division sort of improving its performance going forward? And it came to that if you could give us some guidance on the costs or how we should think about the costs going forward, particularly the CARL tariffs. And my second question is just in line order. How do a scenario perhaps in the second half or later in the year if we have a, let's say, a slowdown in the market, would you still are you still flexible to being able to take down some prudence in the current system perhaps to support the market or be a bit more market friendly? Those are all your questions. Okay. Ben, thank you for your question. It's probably the iron ore, it creates a slowdown in market, which we don't see coming so soon, but if there's something typically happening, yes, we first thing we would do is to reduce our sales parity purchasing, which is around 10,000,000 to 15,000,000 tons a year. And secondly, in the sourcing system or in other small mines, we have times we could reduce or shut down temporarily where we have the lower margins. So that's a possibility and that's our profitability. And then we would manage to close our contracts through our offshore inventories. Regarding the coal, the coal actually, we have had some success. We are thinking about 2018 this year as a year of accreditation, a year of trying to put things in order with the philosophy of the eye in our business that I know that's helping the tool guys to achieve that. We had a good already good progress on the commercial front, where the price realization is getting better and better. The OpEx is down a little bit this quarter. But what we are doing is deliberately fixing some problems and deliberately maybe some slowing down some areas. This is an example. We have some ways certain issue was behind schedule in some specific areas, so we took to the TIGI to recover that strip ratio to normal levels. And we had a we are drilling much more out in order to get the planning possibilities as well as one more important point, which also affects the mix, the yield that the natural gas coal, which is slightly below 60 now. This is the decision we took to mine out a certain pit called Sogapinta, where there's some ore still there that we need to mine the route in order to use this pit for the new tailings to avoid the new tailings down. So you see there is lots of actions we could mine better that we are deliberately going for a more sustainable preparation for 2019, we will now get more sustainable operations. And if you take out the tariffs for loans, the COVID finance instruments, if you look down the road, we see OpEx around $60 a ton. And the tariff, we also have an important fixed cost component. So therefore, we've increased volumes should come down. We're expecting it to stay the right between $20 to $25 to $10 which adds to the $60 to $50. And the return to value between $5 to $10 So all should be a full quarter cost as you continue to release around $30 per Thank you very much. Just to clarify, so the tariff is not a variable cost? We have various components as well because the logistics model has to pay some some have some auditors of the concession, which are variable. You may argue that some of the maintenance costs are variable as well in a long because it's big for everything because there's 2 components. But the debt service component is mostly fixed. Yes, mostly Our next question comes from Alfonso Salazar with Scotiabank. My question goes back to future growth. I understand that right now the priority is in dividends and buyback. But if the opportunity arises later on to grow through M and A, Is there any preference in terms of commodity or any possibility of value diversified away? And I understand you want to be less exposed to what I don't know in the future. So what do you think that could make sense for value portfolio? And regarding the logistics and energy, what are your plans to replan it there? Thank you. Thank you for your question. Regarding the diversification, because this is our real diversification. This is what we have been looking for is to increase the stake of these matters in our total share generation. So yes, we want to be more diversified, but to give diversification has to happen in common with the areas that we already made in the past. Thank you. And regarding the logistics and energy We want to be self sufficient in the production of energy because this is regarding taxes and transportation costs, it's very efficient return wise when you are self sufficient. And we are part of that. That means that we have a lot of opportunities to increase our pricing energy for the purpose of reducing our EPCOT in our operation. In August, we are Actually, we are in again, we got to this position. We want to increase our stake in the alliance as of today. Because we see that the DRI is very good operation with a fantastic upside. Our next question comes from John Samnathos with John Samnathos Fair Employment Research. Thank you very much. I'm a shareholder and I couldn't be happier. The production in the first half was below the rates of the rally day guidance December 6 to each product line, will the second half hold up? And the first half rate was 35% short in coal. What do you think the total coal production will be this year and next year? John, thanks for the question. Peter speaking, yes, what we think and we are keeping our guidance of around 3.90,000,000 tons per day in this year. That means in the second half of this year, we are going to produce in both quarters, we are going to produce over 100,000,000 tonnes. For implementation in June, in June, we already closed this business. Regarding coal, we are really analyzing during this quarter all the actions we have taken in order to recover the production loss. And we will probably then analyze it. And if it's the case, we are going to announce and talk about the new guidance in the next quarter. Our next question comes from Tyler Cowen with RBC. Yes. Thank you very much for the call today. Just have a quick question in regards to Peter just on the chasing the iron ore market. We've seen a big increase in the discounts for elements like phosphorus. Wondering if you could describe in your view how much of this is business real being out of the market? Or is this more just the natural progression now of the changing glass burner size in China? And in your view, what would what number of profitability would you need to get to in China China to move the market away from the structural freight that we've seen recently? Really stated in the previous call that I do believe this is a structural trend. It has to do with proof with asset and prefab collections, the fact that the Chinese concentrate, which has a very low aluminum silica ratio, lent out the market substantially in the last years. While it's just to cut some high CVV products, it happens to have a lower volume of zinc. And then there is the whole depletion going on in the rebuild that we're seeing in terms of quantity, but in terms of quality, how we can utilize phosphorus rights in Australia. Therefore, I don't expect this to change so drastically. I have explained also why our new product, a flagship that we have with Brazilian brand farms, which next year will become our biggest volume. After it's wider, we are achieving premiums of $5 to $7 over the $62 benchmark. We also have a niche developed a niche product called Sinterfeit, a lower limit of Sinterfeit, which comes directly from the period. And this is achieving actually $10 premium in certain segments. So, we believe this is here to stay. And actually, what we believe is if there is a change in margins of steel mills or in the pulp price, which will actually reinforce the existing trends of productivity, which comes from the supply side platform. So we don't see this changing. And it's a tremendous opportunity for Vale to differentiate its life. What we are doing, we first differentiated ourselves with 65 caratas per year. Now we are going to differentiate further progressively with the Brazilian brand funds in terms of loan changes. Thank you. Our next question comes from Ayman Borde with Black International. Hi. Thank you for doing the call today. Actually, my question that I have in mind was along the same lines of the previous question. In the Q2, you had added $7 I just wanted to know what you think are the sustainable premiums? And also if you can comment on your competitors, we've heard various pieces of use of other players also trying to upgrade their products. And you did mention in the Q1 that Q1 Product Institute is if you can talk about any of your competitors and their strategy and how they might benefit from this investment of Rami Yes, this is Ashu. And of course, nobody is standing still. What you see, what these initiatives happen in Australia, FMG announced the Arizona project, which has the higher IT content, We have others like HPD and Rio announcing South France and But all this and then you have the Yandi depletion coming in the next year. So this means there is a structure the quantity is very rare, but the quality is very different. And it may achieve the same degree concept, but the inferences will be not the same. At least the aluminum exposure ratio will go up, which helps our premiums. And that's how we differentiate our stores. So you mentioned the question about premium in this quarter. It will go up in the next, of course, 54 elements should be there, but it's really going up. For instance, the new BRDF we are selling to the market, we have some contracts where we don't have share streams, right? And we are a company honoring our contracts. That's the market we're in the next quarters and years realize that this is a new trend, and it will be twice accordingly. So I think that's everything. So I think we are in a very good moment. And again, we are differentiating ourselves from our competitors through the premium products. 1st, we have more drawings coming out of Parazas. 2nd, we have more solid production from industry in the next few quarters. 3rd is that this DRBF that was explained by TIKES that we are going to execute conquers and therefore, do the high price to will react accordingly to the And just to finalize, the other fear, the other fear that the market has that kind of that has excess volume because we are still ramping up in R and D, That is not a concern for us anymore. We are selling fiber to vehicles before the harvest and the tariffs for the next year. We are selling fire in the different segments like this in Europe, like some volumes to India. We are feeding parallel plants into our own pellet plants in order to maximize productivity. And in China, we're just in a big opportunity for us. And China is investing very much into quality with the tariff season because of the pollution, because of the gas that we formed. I don't know if you should know, but it's roughly we are investing roughly the capacity of 50,000,000 tons, new capacity of 50,000,000 tons of pellets production capacity in China, with surveillance technology, which means we can use is amortized ore. This is €50,000,000 is the size of the whole valley of electricity, which is €60,000,000. So where the fees going to come from for this missed capacity? And we hope and we expect part of this new demand will exactly come from the current West, which will be built in the ground. And will therefore be absorbed by this new market opportunity. So no excess no excess volume at all anymore in the market for cardiovascular cells. Just as a follow-up to that in terms of investment happening in the Chinese market, we've also heard various reports about them investing in electric car furnaces and developing the scrap market, which over the long term would be a threat, I guess, to the I don't know market as a whole and especially to Vale. In the short term, I guess, let's not from what you've heard, has not been kind of as much due to the cost retention of scrap being higher. But do you think that is a threat that, of course, the market is worried about, but Huawei concerned about the threat from electric arc services taking up market share from bus services in China? I think, of course, the settlement structurally there, but China will have more obsolete scrap generated in the next years. The scrap story is a really long term story. It's roughly 10 years out. And it has to be structured first in China. The physical, the electric car furnace is the energy. Energy is not a cheap thing in China. So electrical furnace is a prerequisite energy. The scrap distribution channels in China are not organized. And so we of course, there will be some effect, but I don't expect this to have to be in the short and medium term, it's certainly in the long term. It is mostly coming from it's going to come today. So it is always Our next question comes from Gustavo Gregory with Vertical understand here, with the net debt policy being right around the corner, should net debt further reduction to gross debt? And platform, where would the company place gross debt reduction in its priorities vis a vis other capital incentive, few That means that it is a place of our rights. It is being performed this way. It will continue to be performed this way. Okay. Our next question comes from with Itau BBA. A quick follow-up on the DRBF, Peter. This is despite the premium on DRBF is quite new to us. And it has varied a lot in the recent months, right, according to the chart you put in the press release. So it was below $2 in May and above $10 in July. So if you could explain to us the main reasons why it varies so much and what is the sustainable level that you think should be placed going forward? And the second question for Eduardo. You mentioned in the previous call about the trend of electric cars becoming a reality. So I'd like to hear from you what is the company's view on the size of the potential market and where will the growth come from? Explicit in the market. But it was always there. The difference is that we have changed our policy in the space. We are not selling a thing that's anymore. We are selling at fixed price. That means that the BRDF is becoming part of more and more of the price formation of the 62 index, okay? And the reason that the slowdown, why is it becoming so clear now? And the reason why it happened 2 months ago is simply the fact that if you look at the stockpiles in China, you saw you see that Australian material is piling up and Brazilian material is decreasing. And that's not because Brazil is not delivering resilient, it's because the demand in Brazilian ore is higher than the demand of most some of the Australian oils. And that means the premiums. So the structure is as far as the same on the depletion, as I told the alumina story, there is some fundamental concerns in the market, which now becomes very explicit. And the market will have to react for the moment, market is reacting to Brazilian brands, which are higher premiums. Are we expecting to increase this in the future and then probably stay at those levels. Okay. Markus, just to give you some clarity on the story. I think it is a place This year, we're talking about the 38,000 tons demand for batteries from fuel use of batteries. So it's almost, I would say, relevant, but very, very, I think, not of impact. But within scenarios that we put greater than the rest of the government decisions have been taken around the world, It's an even higher from £300,000 to £500,000 of diesel. All the excess capacity that has to create in Class 1 has been fed into Class 2. So we are positive. We always work in a conservative scenario to deal on what year. So that has to be done, as we mentioned in the previous call, we need to organize our house to be ready for this growth. And to drive it from mainly as we are China and Abid, we are leading to China today. Although there was an interesting the growth of EVs in China due to a macro factors. It's relevant for the pollution that is impacting our neurology, they've been talking all the time. It's relevant for the geography because they're going to build a new industry around the wells. Development of their grid, they just have to start all the renewables that they have. So for China, it's a no brainer. They're already producing a range of 1,000,000 cars a year this year. It's obviously a gain. But in the sense that we are really conservative on how we approach the need. So we're really focused on our handbook to be ready for that. But keeping some numbers to you, This concludes today's question and answer session. Mr. Fotis Hartman, at this time, you may proceed with your closing statements. Thank you. Again, once more, it was a pleasure to have all of you in this call. And I hope to have you addressing the next one in the next quarter. In order to finalize, I just want to emphasize that the company will continue to perform the same way as we performed. So the stability and the stability of the company is here. We are hoping to get in the next quarter the same kind of results or even a little better than the results that Haitians have delivered in the former quarters. So thank you so much for all of you and have a good day. Bye bye. That does conclude Vale's conference call for today. Thank you very much for your participation. You may now disconnect.