Earnings Call: H2 2020

Feb 24, 2021

Ladies and gentlemen, welcome to the EDP full year results presentation twenty '20. My apologies for the slight delay today. My name is Abby, and I'll be coordinating your call. Will now hand over to our host, Miguel Viana, who is the Head of IR. Miguel, please go ahead. Good afternoon, ladies and gentlemen. I hope that you are all safe as well as your families and friends. Thank you for being with us today in this conference call of EDP's 2020 results. We'll begin with a brief introduction and the main developments of the period by our CEO, Miguel Stuelden Raz. Then our CFO, Rui Teixeira, will provide us an overview of the year end results. Finally, we'll then move to the Q and A session in which we'll be taking your questions both by phone and via our web page. We anticipate today's call to be shorter than usual, given that tomorrow, we'll hold our strategic update at nine a. M. Lisbon and London time to present our strategy until 2025, which I also take the opportunity to invite you all to join. Therefore, this call is expected to last no more than fifteen minutes. I'll give now the floor to our CEO, Miguel Stueldenrad. So good afternoon. Welcome to all of you. It's nice to have you back, and thanks for attending the CDP twenty twenty results conference call. I hope you're all safe and well during these uncertain times. I'd move on to talk about the 2020 targets and essentially our resilient business model and execution. But before I do that, I'd just like to start this results presentation by acknowledging and thanking our teams at EDP. I'm truly honored by our ability to adapt and work under these current circumstances, delivering results and superior value to all stakeholders. Thanks very much to the teams. I think it's been an incredibly difficult period, they've been delivering. The last couple of months in particular have been marked by a significant volume of transactions and the teams have delivered flawlessly. I think this collective team effort combined with our resilient business models allowed us to mitigate the negative impact that the pandemic is causing across sectors globally. So as we look into the future and tomorrow at the strategic update, we'll be providing further insight into what the future looks like for EDP, we will continue to invest in the energy transition. I expect EDP to continue to play a key role in the recovery of the economies where we operate as well as to create much needed employment, not only ensuring a just transition but also having a positive impact in society and all of our stakeholders. So let's move now to our 2020 results. In spite of this difficult environment, I'm very pleased to say that we've delivered across all 2020 targets, showcasing our resilient business model and strong execution ability. In the 2020, we managed to reach financial closing in all key pending transactions and this allows us to start 2021 with a new portfolio with a reinforced low risk profile and fully aligned with the energy transition. We have also added around 800 megawatts of wind and solar capacity in the fourth quarter, reaching 1.6 gigawatts of renewables additions in 2020. And we've also concluded two sizable asset rotation deals in Spain and in The U. S. Also in this last quarter, we saw a recovery in power prices, both in Iberia and Brazil, which had positive impact on our results. Regarding FX, our performance continued to be negatively impacted by the Brazilian real depreciation versus the last year. So overall, in 2020, our recurring EBITDA reached EUR 3,700,000,000.0 in line with our previous guidance. So it increased roughly 3% ex ForEx. Recurring net profits increased by 6% to EUR 900,000,000 in line with the guidance we provided in the last quarter results. This is supported by EBITDA performance but also by the improvement in the average cost of debt by around 60 basis points, which has been reduced to 3.3%. Our net debt declined 11% to around EUR 12,000,000,000, leading our net debt to EBITDA ratio to decrease to 3.2 times, in line with our target. I'd like to highlight and stress that the net debt figure and the net debt to EBITDA ratio are the lowest reported by EDP in thirteen years. Regarding dividends, the Executive Board of Directors will propose to the Annual Shareholders Meeting taking place in April the distribution of a 2020 dividend of $0.01 9 per share, which is a dividend floor floor per share in our dividend policy. So globally, we managed not only to deliver growth but also to improve our portfolio and risk profile. And this is setting the stage to capture opportunities ahead and we'll talk about that tomorrow. Let's move on to Slide four. So here we can see clearly that electricity demand decreased across the markets where we're present in. There's a slight recovery during the second half of the year as the economy started to rebound, in particular in the fourth quarter in Brazil in our concession areas with residential demand picking up. In 2020, electricity demand in Portugal decreased 3.3% year on year, while in Spain and Brazil, this decline was greater in percentage, closer to 5%. Despite the severe demand shock witnessed across our regions due to the COVID crisis, EDP's recurring EBITDA increased by 3% ex FX, while recurring net profit increased 6% during 2020, which again sheds proof on our resilient business model. This being said, COVID impact is around EUR 100,000,000 at EBITDA level, mostly concentrated in the 2020 with a more limited impact in the third quarter and the fourth quarter. So move on to Slide five and talk about EBITDA. So as mentioned before, recurring EBITDA declined 2% year on year. It's penalized by the real depreciation of around 25% in the period. Excluding this impact, EBITDA excluding FX increased around 3%. On renewables, recurring EBITDA increased by 2% year on year. This is supported by recovery of the hydro resources in Iberia to close to normalized levels when compared to a very dry 2019, although in 2019 we then had a strong fourth quarter. This effect, combined with the good performance of our asset rotation strategy, which provided gains of EUR $434,000,000 in 2020, more than offset the deconsolidation effect of the wind assets sold in the relatively weak wind resources in the period. Through regards to networks, EBITDA decreased 11% or 3% if we exclude the adverse FX impact, which accounted for most of the decline in Brazil. In local currency, the networks in Brazil showed a 7% EBITDA increase, mostly driven by the positive tariff updates on the back of inflation updates. And this offset the lower volumes of electricity distributed, around minus 5% year on year. There was also a strong improvement in EBITDA from transmission following the full commissioning of one of our lines and the evolution of construction works in the remaining lines. In Iberia, the EBITDA evolution reflects mostly the decline of regulated returns to 4.85% in Portugal and to 6% in Spain. Finally, EBITDA in Client Solutions and Energy Management was flat, driven by the good performance of Energy Management and resilience of the supply business and this has compensated the weaker thermal production and the negative FX impact. Finally, I'd like to highlight that EBITDA was also positively impacted by the good OpEx performance in the period, with the OpEx decreasing 3% on a like for like basis, not only due to the tight cost control, but also the implementation of several initiatives for cost reduction, including the faster acceleration of the digitalization fueled by all the changes associated with this pandemic. Obviously, one of the positive few positive side effects of this pandemic. Let's move on to Slide six. So here, as part of EDP's decarbonization strategy, the year of 2020 was marked by the closure of Sines, which was EDP's largest thermal plant, around 1.2 gigawatts. After thirty five years in operation, we submitted in October 2020 a request for closure also of Salt To City in 2021. So now both of these power plants basically will be decommissioned and closing. We are also evaluating the development of other projects in the region following up our commitments towards a just transition. It was also last year that EDP completed disposal of two CCGT plants to Total of around 800 megawatts and this also contributed to reducing the thermal production assets in our portfolio. As a result, the combination of reduction of thermal production together with the addition of more renewable resources and the integration of Viejo's wind farm portfolio combined 1.6 gigawatts led to 74% share of renewables in our electricity generation mix. This compares to 66% in 2019. In total, we have an additional 2.4 gigawatts of wind and solar projects under construction. So as you might expect, our revenues from coal will now follow a reduction path, representing only 6% of our revenues in 2020 and Sines accounted for 2% of that. So as we keep accelerating EDP's decarbonization path, our specific CO2 emissions fell by 32% this year. So it's a strong downward trend that will be continued also in 2021. If we move to Slide seven, and I think this is an important slide because it shows basically a balance of the twenty nineteen-twenty twenty two business plan targets. And it shows that although 2020 was in a typical year, we managed to achieve and we managed to deliver most of the key targets, if not all of the key targets. We will be talking about revised targets tomorrow at the strategic update, and it will be a moment also of reflection on how we see EDP going forward. But to talk to you a little bit about the targets that we have delivered. We secured 7.7 gigawatts of wind and solar additions in this period, twenty nineteen-twenty twenty two period, and this exceeded the seven gigawatts of planned additions that we've had in our strategic plan. We've managed to ensure attractive returns of above 1.4 IRR for WACC for these projects, which as you know was a threshold. These will be commissioned until 2023. And once again, I think it highlights that we are continuing to see strong returns on the projects that we are taking investment decisions on. We have grown our RAB in the distribution business through Viasgrave acquisition and also through organic growth in Brazil, namely the transmission lines. We targeted more than EUR 1,000,000,000 per year in the asset rotation proceeds and we've managed to deliver over EUR 2,300,000,000.0 between 2019 and 2020 with an average premium per megawatt, which was 50% above the assumption in our plan. And finally, we managed to exceed our 2,000,000,000 disposal plan, reaching a total of 2,700,000,000.0 of proceeds. This included a successful portfolio reshaping in which we managed to swap part of our Iberian portfolio of merchant hydro in Portugal as well as our retail activity in two cities in Spain for Viesgo's regulated assets at what we consider very interesting valuations on both sides. And I think this clearly reinforces our low risk profile aligned with the energy transition. If we move on to the next slide to talk a little bit about some of the other drivers. So our leverage ratio, net debt to EBITDA, as I mentioned earlier, came down from 4x to 3.2x, so in line with what was defined in our plan and also in line with our expected financial deleverage. Regarding efficiency and digitalization, we delivered on our target of EUR50 million of cost savings in 2020 excluding growth and we're on track to meet the EUR100 million target by 2022. Finally, our total shareholder return in 2020 was a solid 43%, so 30% above the euro stock's utilities in the period. And we are keeping our predictable dividend policy of zero one nine per share even after the increase in our share capital by 8.5% last August in the capital increase. So let's talk about the future. The future ahead looks very positive. The energy sector, we believe, really needs to be transformed and there's a reinforced political will in this effort towards decarbonization. This is particularly true across our relevant markets, namely the green deals in Europe and also the plans of the new Biden administration in The U. S. We have a renewed management team to deliver on this challenge. And so I strongly believe that EDP is well positioned to deliver on long term growth and value creation for our stakeholders. We have a unique starting point and I hope you'll all be able to join us tomorrow for our strategic update so that we can present our strategy going forward. So I'll now pass to our CFO, Rui Teixeira, for a more detailed analysis. Rui? Thank you, Miguel, and good afternoon to all of you attending this call today. It is with great pleasure that I will further deep dive on EDP's financial performance for the year of 2020. So starting on EBITDA, a recurring EBITDA, very flat, a combination of higher capital gains on asset rotation that offset weak wind resources and deconsolidation effect. So starting with wind and solar, despite the COVID pandemic, in 2020, we added 1.6 gigas of capacity in nine different countries. This is almost double of the capacity added in 2019. So the recurring EBITDA was broadly stable at EUR 1,650,000,000.00 in 2020. This is mainly due to impacts from mix three different drivers. One, the 1% decline in the average installed capacity following the deconsolidation of the wind farms that were part of the two asset rotations. One closed in Europe in July, 51% of one giga and another one in Brazil in February 2020 for 100% of 137 megawatts. Secondly, the 5% reduction in electricity production penalized by lower than expected wind resources. And three, the higher asset rotation gains of €434,000,000 in 2020, which include EUR $2.00 7,000,000 from the establishment of the offshore joint venture Ocean Wind with ENGIE. So if we move on to the next slide, the hydro recurring EBITDA was up by 5%. This, of course, is driven by a strong recovery of the hydro resources in Iberia, while although penalized by the Brazilian real devaluation. So in hydro, recurring EBITDA was up by 5% year on year to $671,000,000. In Iberia, this EBITDA increased 17%, supported by a recovery in hydro resources just to 3% below historical average in Portugal versus 2019, which, as you remind, was a very dry year. This explains the 33% increase of hydro production. The decline of average selling price was mitigated by our hedging strategy, which allowed to show a decline of average selling prices of just 8% year on year versus a 21% decrease excluding hedging. In Brazil, the hydro generation performance was impacted by the particularly weak hydro year due to an unfavorable energy context in the first part of the year with the very low PLD spot prices, not fully compensated by some recovery in the last quarter. If you can move to the next page and moving into Networks EBITDA, these are down 11%, mostly driven by the Real devaluation, although there was it was a strong performance in local currency. But as you can see, in Electricity Networks, recurring EBITDA amounted to EUR $891,000,000. This is down EUR $1,150,000,000 year on year. This is largely reflecting the 25% depreciation of the Brazilian real against the euro. If we were to exclude ForEx, our recurring EBITDA would have decreased by 2%. In Brazil, the recurring EBITDA in local currency went up by seven percent. This is backed on the 60% increase of transmission EBITDA following the full commission of Lot eleven and the positive evolution of construction works in the remaining five lines. Regarding distribution in Brazil, recurring EBITDA in local currency fell by 3%, driven by the 4.6 decline in distributed electricity and by some material positive impacts from tariff revisions in 2020 sorry, 2029, which were partly compensated by the 2020 annual tariff updates. Coming to Europe. In Spain, recurring EBITDA amounted to €136,000,000 a decline that reflects the new and latest regulatory framework that is approved through 2025 and some positive adjustments from previous years that were positively impacting our 2019 results. In Portugal, recurring EBITDA decreased to EUR $485,000,000 in 2020. That's a 6% decrease year on year, penalized by the lower rate of return on the RAB, although there was a good performance on cost control with the recurring OpEx in Iberia decreasing by 1.6% year on year, so quite a strong focus on efficiency. If we move to Client and Solution, we will see that was our EBITDA was pretty flat, of course, benefiting from successful hedging strategies that we implement overall as group and this one applicable in Iberia. So our EBITDA from Client Solutions and Energy Management was at the ended the year with EUR $480,000,000. In Iberia, the good result in Energy Management compensated the 18% decline in thermal production, largely explained by the 41% reduction in coal. So the EBITDA from the supply side rose 7% year on year, fully supported by the recovery of demand in the second half after a very harsh second quarter, particularly in the B2B segment, but also the resilient demand in the B2C segment. Also, this business platform has experienced an increased penetration rate of new services, which support positively the results. In Brazil, EBITDA from Supply and Energy Management was positively impacted by the mark to market of long term contracts, and this helped to offset the decline in volumes and prices in the supply market. And in Thermal operations, EBITDA benefited from the annual inflation update to our PPA contracted revenues. So now moving into our efficiency metrics in the operating costs, our OpEx, 3% on a like for like basis, that's excluding growth in 2020. In Iberia, OpEx fell by 1%, in line with the decline of average F count. Brazilian OpEx decreased by 2%, excluding growth, and that's in local currency, in a period in which the local inflation rate was at 4.5%. And finally, the 1% increase of adjusted core OpEx per megawatt as we're in EDPR was driven by the growth of the renewables development activity. So quite a strong focus on ensuring efficiency. So if we move now to the financials. Interest related costs are down by 16%. This is supported by a 60 basis point decline in the average cost of debt to 3.3%. As you can see in the table on the right hand side, the yields in newly issued bonds this year are clearly below the rates in maturing debt, so definitely improving the overall cost of debt. Also, I think it's worth highlighting that EDP has more than EUR 5,000,000,000 placed in sustainable financing, which has also benefit from a growing investor appetite, capturing this very competitive cost of funding. So I'd like now to move to the next slide and just to talk a little bit about the debt. As mentioned by Miguel in the beginning of the presentation, we delivered on our deleverage commitment, reducing our ratio net debt to EBITDA to 3.2x, a very sound leverage for our rating targets. Recurring organic cash flow increased 27% year on year to EUR 1,800,000,000.0, driven by the normalization of hydro resources, also, of course, by the higher asset rotation gains and lower interest charges. Net expansion investments rose by 33% due to the step up in expansion activity to EUR 1,500,000,000.0, of which 88% was allocated to renewable projects under construction or development. This amount was particularly mean, it's particularly relevant and it was partly compensated by the strong execution of the portfolio reshaping. In December 2020, we completed the €2,700,000,000 disposal of merchant assets that includes six hydro plants in Portugal and a portfolio of two CCGTs and the B2C platform in Spain. And on the other hand, the acquisition of ESGO in Spain for total net impact of EUR 2,100,000,000.0 that was partly funded by the EUR 1,000,000,000 equity rights issued that was executed last August. So our core expansion activity mainly included build out activity, justifying the EUR 3,200,000,000.0 expansion investment and increased by 58%, while proceeds from asset rotation went up to EUR 1,700,000,000.0 in the period to help fuel this growth. And as you know, it's a very it's an integral part of our growth pattern. So finally, the €600,000,000 positive ForEx impact following the devaluation of the Brazilian real and the U. S. Dollar versus euro, also contributed to the 11% decline in net debt to EUR 12,200,000,000.0 with a net debt ratio improving to the 3.2x, as I've mentioned before. So if we move to the net profit, net profit went up by 6%. This is driven by, of course, the operational results, but also by lower financial cost and the decline of noncontrolling interest. So I think this also reflects, as I mentioned before, the very good result in our Energy Management business in Iberia. Of course, the recovery of the hydro resources, strong performance overall on the financial results and definitely continuing to benefit from the low interest rate environment. So these positives more than offset the negative performance of our share in EDP Brasil, net profit from the currency depreciation, with an overall noncontrolling interest down by 7% to EUR $346,000,000 in 2020. Net negative nonrecurring items impacting the net profit decreased from €342,000,000 in 2019 to €101,000,000 leading to a 2020 reported net profit of $8.00 €1,000,000 Among the several nonrecurring effects in 2020, I'd like to highlight the costs related to the closure of CNES coal power plant, the provision on the alleged overcompensation regarding the CMEC plant's participation in the ancillary services market during twenty nineteen-twenty thirteen the cost of the extraordinary energy tax in Portugal impairment losses related to thermal power plant in Portugal and Spain curtailment costs due to early retirements, cutting gains from disposals of commission generation and supply operations in Spain and Portugal and gains resulting from the final terms of the regulatory dispute over the GSF cost in Brazil. So as mentioned before, I think that it's important to highlight that even though it was a very tough economic context due to the COVID pandemic, we are very pleased with EDP's performance in 2020, which confirms its distinctive and resilient business profile. With this being said, I take the opportunity to thank you all for your time today. We will now open the call for questions. I would also like to remind, as Miguel mentioned before, that tomorrow we will be presenting our strategic update with an overview of our future business strategy with which we hope that you can all attend. So thank you very much, and we can move to Q and A. Thank you, Rui. We can start now with the questions from the phone, please. Our first question comes from Sarah Pacini from Mediobanca. Sarah, your line is now open. Please go ahead. Hi, good evening, and thanks again for taking my questions. I have two. The one and the first one is very specific, and I hope to explain me well. It's actually regarding the CapEx figure in your results report on Page five. I see that the expansion CapEx related to networks is actually negative is down minus percent year on year, yes. So I was wondering, can you explain this figure why there is a decrease? And if this CapEx is allocated to EDPR level and that explains the increase in the financial investments at EDPR level. So if you can help me to understand the figure. And the second one is related to Brazil. In Brazil, we have at TDP Brazil, we have seen a one off positive related to the risk negotiation of the Brazil hydrogeological risk. So can you say if this one off impact will also have an impact on the EBITDA for 2021 going forward regarding the hydro in Brazil? Thank you so much. Okay. Maybe I can so just a quick comment on the Brazilian and this exposure to the presume that you are referring the GSF, right, and the fact that it will come as an extension of the concessions. So here, just to provide a Yes, that's right. Yes, okay. So I mean, the approval process is ongoing. I mean, I think it's well on track. This will result in some compensation in the form of a concession extension. In the case of Enerpaccio, this is about forty one months. But so what we booked in 2020 was BRL389 million as a one off gain on accounting. So that's approximately €66,000,000 impact at EBITDA and the €33,000,000 net impact in net profit. So I mean, I can share with you some more light, but we book this as a one off gain on the accounts. I'm sorry. And then regarding the first question, could you please repeat the first question because I couldn't really follow. Yes, sure, sure. Sorry. It's on the investment that you show in Page five of the results report, so the consolidated CapEx is €2,900,000,000 and that is includes a reduction in the CapEx for networks. So I was just questioning what that's related for. Hi, Sara. Regarding the financial investments, essentially, this increase is related with our investment in Ocean Winds, okay? So we are so transferring our assets to Ocean Winds, the JV with Engie in terms of offshore. And this is the most of the increase of financial investments. Regarding networks, the decline is also obviously related with the Brazilian real impact. As you know, most significant increase of our CapEx is in networks is in Brazil and we had a 25% devaluation of the currency. Thank you. Many thanks. I think if I don't know if we have some more questions on the phone. If not, we can go for the questions on the web. And so the first question that we have is from the analyst, Mamadov, from Bloomberg. Can you please comment on the recent Spanish renewable auction, low prices and The U. K. Seabed lease tender? What do these means for the returns from renewables going forward? Okay. So thank you, Madhav. First, think in relation to the Spanish renewable auction, we've defended we've always been defending that we like when there are these type of auctions for PPAs or in this case, long term contracted with the system. And so we prefer that type of system to investment in merchant. So we're quite comfortable, and we like the fact that the Spanish government has moved to this type of auction system. In terms of the actual results, I think they're in line with expectations. I mean, obviously, the cost of solar has been coming down significantly over time. We are looking at levelized cost of energy for solar in the 20s. So we well, as you know, won around 140 megawatts in that process and meeting the returns that we were looking for. And we were sort of in the middle of the pack of and as you know, there were three gigawatts, which were auctioned at that point. So we're sort of quite comfortable with the result of that. If you compare that, for example, with the solar auction in Portugal where you had results in teens or prices that were much lower than that, in one case, think even €11 but many others that were sort of EUR 15 or so. I think the Spanish auction had slightly higher prices and so we think those are more compatible with the sustainable long term remuneration that we're looking for. I would differentiate then between onshore wind, solar and offshore. And obviously, we can get more into this tomorrow because we're doing the strategy update, so I don't want to preempt too much. But clearly, in offshore, in round four, I wouldn't necessarily extrapolate I wouldn't at all extrapolate to other parts of the renewable value chain and technologies. So I think that is a one off. And it's certainly obviously, it's very low returns that we saw there. But as I say, it is an option for a seabed and we saw basically the oil and gas coming in. We aren't seeing them coming in, for example, in onshore or solar. So this is something, as I say, we can get into in more detail tomorrow. But yes, I mean, I think one of the advantages that we have is having this global footprint, which means that when we think that things are we're not getting the returns that we like, we are able to invest in other geographies and in other technologies to get that those returns. Okay. We have also a question from Javier Guerido from JPMorgan. What regarding the increase in terms of net financial interest in the fourth quarter to 143,000,000 versus €119,000,000 in the third quarter. Thank you. So so a part of this increase is related to nonrecurring costs, which are a result of the buyback of that in the and that impacts, of course, the Q4. So overall, in 2020, that's EUR70 million, EUR13 million of each in the Q4. Also, there is a 10 bps increase in the average cost of debt due to the higher interest rates that we observed in Brazil in the Q4. So I would say these two main factors contribute to this increase. Thank you. Okay. Now from Georgi Marines at GB Capital. Two questions on Portuguese regulation. And one is if it's possible to clarify who would support an eventual extra tax charge on the hydro sale, EDP or acquirers? And the other one that maybe we can join, what is your expectation about regulatory risk in Portugal in 2021 regarding sales and clawback? So I'd first start off by saying that and as was clear from the results, we had approximately €90,000,000 of profit in Portugal. It represents roughly 11% of our total net profit, which means 90% of our profit is coming from outside Portugal. And you'll have seen that EDP Renewables was obviously a big driver of that profit. Secondly, we always pay our taxes, the taxes which are due. We pay income tax, we pay the trauma, we pay the social tariff, we pay the extraordinary tax, we pay the clawback. So we pay obviously all the taxes and we are by far the largest taxpayer, I would say, corporate taxpayer in Portugal. The transaction in question, I assume will be treated in line with the rules applicable in Portugal and in Europe. This was a very standard transaction in terms of the structure. Essentially, we are talking about transferring, if you want, six dams together with all of the assets and liabilities associated with these dams, which means over 1,000 contracts. So this is not just a simple transaction. The usual structure, the most standard structure for doing this is to do a demerger into a new company and then to sell that company to the third party. And that is what EDP did in this case. It has done this in other cases and many other companies do this and EDP has also done this in other countries. So this is a very standard transaction. And obviously, the tax treatment will be whatever is applicable in terms of the Portuguese law. So I think this in terms of the tax. In terms of the expectation in relation to regulatory risk. I think regulatory risk. So essentially, I think the question was in relation to the sales and the clawback. So what has been the commitment that we've heard from the government and from the relevant bodies is that there would be a commitment to reducing the extraordinary tax as the system debt declines over time. And so I think there's a broad alignment that it makes sense as the system debt declines that, that tax would also be phased out since it is an extraordinary tax. And so we are assuming that it will decline over time. In relation to the clawback, again, I mean, the clawback is in place. It's obviously, the value is varying depending on the year. It's the way it's calculated. But we are obviously continuing to pay it on the basis that it's been defined. So the regulatory risk, I think, is simply in the basis of the calculation because it's already something that's been applied over the last couple of years. So that's it. We would expect it to going forward, but obviously with the current levels or potentially even lower. Then I think there's also a question on regulatory risk in Brazil, so just a comment there as well. Listen, I think in relation to Brazil, we've been investing in Brazil for over twenty years, since the late 1990s. And I have to say that the Brazilian regulation is clearly one of the more sophisticated and stable ones. I mean, Brazil has the macro and the political volatility, which we know associated with the FX. But if you actually look at the structure and the regulatory framework that's in place, it's actually very predictable. You have a lot of international investors in Brazil in the sector from all over the world. And I believe that there will be no interference that they will want a fully functioning, if you want, system, which is competitive. I think one of the things about the Brazilian regulatory framework is you have a lot of different distribution generation companies. So there's a lot of competition and there's a lot of visibility on who's performing and who's not performing. So I certainly don't see any need for any type of interference and I don't believe that there would be any interference in the sector. Okay. We have just another question from Georgi Marenges regarding sales as a one off. I'm very sorry. Oh, the sales as one off? Okay. Just to clarify that the results that we are presenting in 2020 still include the sales as a one off, just to clarify that. Yes. So yes. So it's still including sales as a one off. To be honest, we are probably going to move it to include it to simplify the way we report it, but we will be providing more feedback on that tomorrow. We have a final question from also from Mamadou from Bloomberg. Can you please comment on your like for like evolution of retail customer portfolio? How do you see the competitive dynamic evolving going forward and its impact on your market share and margins? So listen, in terms of retail, so it's actually been well, as you know, we sold the B2C in Spain, but we're quite comfortable with the way that the portfolio has evolved. We've had a pretty stable retail customer portfolio in Portugal and B2B also in Portugal and Spain, the market shares have stayed broadly stable on our side. So in terms of the competitive dynamics, there is a lot of competition. There are dozens of suppliers in Portugal and hundreds of suppliers in Spain. And it goes it has certain cycles in terms of more or less competition or more or less aggressiveness. But I would say that in terms of overall market share in Portugal, we would expect to go on reducing our market share over time. And in terms of margins, we would hope that it would stay a reasonable margin, which would ensure the sustainability of the system and all of the different suppliers in the sector. So I think we've seen that coming through. Obviously, there's been some years where it's been more pressured, but I think in general, it's important to have a sustainable margin both in Portugal and in Spain to make sure that it's a sustainable business. And that's what we've seen in the past, and I'm sure it's going to be in the future as well. So we are reaching the five fifty that we were expecting to finish the call. We don't have any more questions. So we hope to count on you on our strategic presentation tomorrow morning. We'll start from nine a. M. Thank you for your participation at this late hour in the day. Thank you Thank everyone. Thanks for taking the time. Thanks. Thank you.