Thank you for standing by, and welcome to the EDP Conference Call of Results, second quarter 2018. At this time, all participants are in a listen-only mode. If you wish to ask questions today, you'll need to submit them via the webcast using the question box on the right of your screen. I must advise this conference is being recorded today on Friday the 27th of July, 2018. I would now like to introduce and hand the conference over to your speaker today, António Mexia. Please go ahead, sir.
Hi. Good morning, ladies and gentlemen. First of all, thanks for being with us today in this conference call for the presentation of EDP's 2018 first half results. As usual, we will begin with a presentation providing an overview of the results and then the main developments of the first half of the year. Afterwards, we'll move to the Q&A section. Our CEO, António Mexia, and our CFO, Miguel Stilwell de Andrade , will be available to answer your questions. We would like to highlight that at this time, we are taking questions submitted via the web. Please enter questions only through our webpage, www.edp.com. Expect this call to last no more than 60 minutes. Now I'll give the floor to our CEO, António Mexia, who will give us an update on developments of the period. Good morning, everybody. You have just heard, as usual, our IR, Miguel Stilwell de Andrade , introducing me.
First of all, thank you very much for participating in the results conference call. I would like to start for highlighting our good performance in the second quarter that was mainly driven by the stronger than expected hydro volumes in Iberia and continuing strong performance in local currency in Brazil. As a result, the first half of our recurring EBITDA in the first half of the year, excluding ForEx, grows by 3% year-on-year, reflecting, as I mentioned, strong underlying growth in Brazil and also in renewables. The 6% negative impact from ForEx resulting essentially from the Brazilian real and US dollar depreciation versus EUR in the period imply that our recurring EBITDA showed a 3% decline to EUR 1.74 billion in the first half.
Also on the positive side, we have a strong year-on-year recovery of hydro production in Iberia versus a very dry first half in 2017 and a positive year-on-year performance on operating costs. Finally, we need to highlight the adverse regulatory changes announced in the last quarter last year, which represented a negative impact of EUR 122 million year-on-year. Net profits stood at EUR 380 million, with the recurring net profits increasing by 5%. We had a good performance on interest cost following the decline on cost of debt by 40 basis points to 3.7 and the double-digit growth in what concerns EPS contribution from Brazil and EDP Renováveis, while net profits in Iberia remained flat.
Finally, we showed a EUR 14.2 billion net debt by June, which represents a 16% decline year-on-year with the adjusted net debt to EBITDA ratio down from 4.4 to 4.9 at the end of June this year. This includes the impact from EUR 600 million of net expansion CapEx, in which 93% was allocated to renewables, and the EUR 700 million annual dividend paid to our shareholders last May. Moving into recurring EBITDA on slide two, going into detail. Recurring EBITDA was sustained by the underlying growth in Brazil, as I mentioned, also in renewables and our hydro improvement despite the adverse ForEx and regulatory changes in Portugal. As you can see, and we mentioned, excluding ForEx, our recurring EBITDA went up by 2%. Going item by item.
In Brazil, EBITDA in local currency grew 17%, propelled by the integrated hedging strategy in energy markets, lower losses from grid, and higher availability in generation, namely in Tessari. In renewables, EBITDA ex ForEx went up 1% year-on-year, reflecting a 7% increase on average in solar capacity, but also lower wind resources in the second quarter 2018, 8% below the long-term average. Finally, in Iberia, recurring EBITDA fell slightly by 1% as the 85% growth of hydro production was mitigated by the EUR 44 million increase of taxes and generation and the EUR 78 million decline of regulated revenues and distribution that was already known. Moving into slide three, we see hydro resources in Portugal that changed a lot in this first half. The first half, we have a significant improvement of hydro, which were 15% above the historical average, being particularly strong in March and April.
This compares to an extremely dry first half, as I mentioned. I would like to note that a significant part of this improvement of our resources was allocated to refill hydro reservoirs instead of being used on electricity production.
Hydro reservoir storage increased by one terawatt hours in the first half of the year, significantly more than what is normal for this time of the year. As a result of very low reservoirs at the beginning of the semester, and reservoirs clearly now above average by the end of June. My figures, if you start the beginning of the year, you will be EUR 30 million below negative, and now we are EUR 30 million above. We have recovered by this at least EUR 50 million. Slide four. Slight performance on operating costs. I think we need always to stress this, and clearly the figures are very strong. In Iberia, OpEx fell by 2% in nominal terms and almost 3% in real terms. Particularly remarkable as we got a 2% increase in average capacity installed and a large portfolio of customers.
In Brazil, OpEx in local currency decreased 1% in nominal terms or more than 4% in real terms, as annual inflation stood at 3%. A noticeable performance on the back of several cost-cutting initiatives, namely the third year in a row of a zero-based budget. At EDPR, core OpEx per megawatt improved by 1%, which includes the positive ForEx impact. If adjusted, it was 2% higher, reflecting the buildup of O&M internalization strategy that will allow us to get further efficiency improvements. Moving to net profit. It increased 5%, benefiting from double-digit growth contribution from EDPR in Brazil. Renewables contribution grew 10%, combining the impact from increase on our equity stake to 82.6% and EDPR net profit growth of 4%. The contribution of Brazil to EDP net profit increased by 32% in EUR terms, following EDP Brasil 59% increase in net profit in local currency.
In Iberia, recurring net profit fell by 1% as the positive impact from hydro recovery was offset by the adverse regulatory changes in Portugal. At this level, I would like to note that the weight of Portuguese operations, the traditional operations in Portugal, on reported net profits went down from 31% in the first half of 2017 to 22% in the first half of 2019. Basically, we are more and more out of Portugal in terms of results. Slide six. Growth. We continue focused on execution of our organic growth, focused on long-term contract renewables and on regulated networks in Brazil. In renewables, we have currently secured 3.8 gigawatts of PPA and feed-in tariffs for the new wind and solar capacity to be commissioned over the next years.
2.9 gigawatts of these long-term contracts secured are referenced to new wind offshore and solar projects spread between U.S., Canada, Brazil, and European Union, of which 1.2 were secured since the beginning of the year with a strong anticipation of the new PPAs in U.S. Of all these projects, we have currently 1.1 in construction stage. On the other hand, 900 megawatts are referring to our current equity stakes in the three wind offshore projects, one in U.K., Moray East, and two in France, which already secured a contract for differences and feed-in tariffs, respectively. As you know, agreeing on these in France, I think it's a very important result.
Moving to Brazil, we have five greenfield projects, four new transmission lines to be built until 2021, 2022, which represents an expected investment of BRL 3 billion, or more or less EUR 700 million, and that are expected to provide a return on equity in the range of 12%-14%. The licensing and construction process is moving ahead of schedule. With the first line that we have started to build, the one that was awarded in 2016, already 17 months ahead of schedule, and with almost 50% of construction work already concluded. I think performing very well. On slide seven, guidance.
What we have said in the time of the presentation of the first quarter results in May, we are now slightly more positive on generational supply, given the recent good performance of hydro generation, and despite the very difficult environment for thermal generation and the supply business, which continued to face significant pressure on margins. On the other hand, the recent devaluation of the Brazilian real may erode the performance in EUR terms of the Brazilian operations. Overall, we have no reason to change our 2018 guidance, and we reiterate our expectation of EBITDA in the region of EUR 3.4 billion and net profit around EUR 800 million, fully in line with what we said in the first quarter presentation. Moving for the bit that is on slide nine.
As you know, we are in a period of stronger regulatory A restriction regarding what we can comment with the market on everything that is somehow related to the preliminary offer presented by CTG on May 11th. Even so, I would like to take this opportunity to summarize what EDP Executive Board of Directors state in our report, and only this, which was released to the market the 9th of June. I remind you that for a more detailed analysis, and I'm sure that you have already visited, you can find a full 91 pages report at the website of EDP. First of all, the report concludes that the price offered does not adequately reflect the value of EDP, and that the implied offer premium is low considering four customary valuation methodologies intensively exposed in the report.
On the other hand, EDP Executive Board of Directors consider that there are merits in the strategic intention of the offer, although given the uncertainty, we will seek more information about CTG from CTG in order to be in a position to form a more considered view. Such an update, we have been working on this front, and we will share information with you in the appropriate time. We are doing exactly what was mentioned in the report. Slide 10. In terms of the potential implication of the strategic intention of CTG for EDP, I would start to refer the significant amount of regulatory approvals in several countries where EDP operates to which the offer is conditioned. Among these, we highlighted in the report the clearance of CTG in U.S.
We need to be working on this front to understand more of this, and that the transaction, the EDP management noted already that this is a domain where everything needs to be clarified. As also in what concerns the contribution of potential assets of CTG in overlapping markets, namely in Brazil, the offshore in Germany, and also minority stakes in EDP projects in Portugal. At this stage, EDP management consider that this intention could be positive and represent relevant value creation alternative benefiting all the shareholders if executed under appropriate corporate governance also in relation with related parties. We stated in the report that the framework agreement conditional to CTG obtaining of control of EDP, containing full financial economic details of such contribution, should ideally be presented to shareholders before them having to decide on tendering their shares.
Regarding China Three Gorges Corporation intention to favor the entrance of EDP into Chinese offshore market, we are analyzing this and of course, we will try to understand if this potential platform makes sense, and it could enhance our profile. In slide 11. Finally, we would like to stress this. China Three Gorges Corporation presents the intention of preserving the autonomous decision-making based on highest international corporate governance standards. The intention to reinforce EDP financial profile by committing to maintain the leverage reduction to trend EDP level and ensure at least an investment-grade rating. At the same time, aiming to retain flexibility to pursue growth and to maintain a stable dividend payout policy with dividend payout not below what has been disclosed by EDP. In our view, the merits of these described intentions depend on their implementation model, which is, of course, not clear at this stage, naturally.
The Executive Board believes that the scope of a potential framework agreement should be also extended to the other relevant commitments presented, namely identity, corporate governance to ensure proper minority protection, financial strategy, and stable dividend policy, as we mentioned already. The extended framework would allow the required visibility for investment decision prior to the offer registration, potentially conditional only to the acquisition of control of EDP end of year. With this, I conclude the summary of the content of EDP Executive Board of Directors, noting that the report contains all the considerations that we can share with you in the subject at this stage. And now I will pass to Miguel Silva for more detailed analysis, and I will come back to the Q&A. Thank you.
Good morning, everyone. I'll now move back to the first half results and walk you through some of the traditional slides. If we move to slide 13, essentially what we have is that the focus continues to be on the renewable energy, having added approximately 600 MW of additional solar and wind capacity. With this, the renewable energy has now reached a weight of 74% of the group's installed capacity and 71% of electricity production. I'd like to highlight that the increase in hydro production of this first half, and particularly the second quarter, of around 72% year-on-year, 85% in Iberia, is due to the strong recovery of hydro conditions. But essentially, we see this continuous growth in renewable generation as we move forward. Moving on to slide 14. Here we see that the EBITDA of EDPR decreased 5% year-on-year to around EUR 686 million.
This is the result of several different variables. On one hand, EDPR average portfolio expands by around 7%. However, benefits from this expansion are reduced by the negative impact from ForEx of around -6%. There's also a 6% decrease in the average selling price, excluding ForEx, both in the U.S., Poland, and Romania. And also the termination of some 10-year-old PTCs in the U.S., which led to a 15% decrease in the PTC revenues, and which you can see here, we have highlighted on slide 14. The wind resource across geographies was approximately 1% below the P50 scenario in the first half, and mostly or almost entirely in the second quarter, when the wind resources fell 8% short of average. So we've had a strong hydro production on one hand, in terms of wind resources, it was slightly below average.
All in all, in relation to EDPR and excluding the ForEx, the EBITDA was up 1% year-on-year. Moving on to slide 15. Here, excluding the 2017 share of lower CMEC of the final adjustment, the EBITDA increased by 26% to EUR 255 million, boosted by a 58% year-on-year increase in the second quarter of 2018. This in relation to generation supply, Iberia. This growth was fueled by, as I mentioned, the 85% increase in the hydro production, around 8.7 terawatt hours in this first half, which accounted for approximately 50% of EDP production. Which also resulted in a decrease in the average sourcing cost, which can also be seen here. The average production cost fell to EUR 22 per megawatt hour.
Having said all this, the performance in the generation supply ended up, although capped or limited by the increase of regulatory costs, which went up 22%, and António has already talked about that. In the end, also the CMEC deviation revenues, which were still in place in the first half of 2017. Moving on to slide 16. Our operations in Brazil. As mentioned, they had a strong performance. EBITDA in local currency increased by 17% to BRL 1.3 billion, approximately, mostly due to efficiency improvements and also to the well-managed, successful integrated hedging strategy in the energy market. Regarding efficiency gains, I'd just like to stress the reduction in the non-technical losses in the low voltage segment with around BRL 30 million impact in results, and also the increase in six percentage points to 98% of availability of Pecém, our coal power plant.
That's also highlighted here on slide 16. Finally, I think it's worth noting that the successful management of regulatory agenda resulted in a reduction of penalties for unavailability linked to Pecém in the second quarter. That has also helped increase the results, which essentially if you look here in Pecém, moved from around BRL 200 million-BRL 300 million in this first half. Moving on to regulated networks in Iberia, slide 17. Excluding the gas distribution networks, which were sold last year, the EBITDA from regulated energy networks fell 23% year-on-year to approximately EUR 314 million. This decrease reflects mainly the performance in Portugal and represents 78% of EBITDA in this segment. The OpEx performance in Portugal was very good, improving 5% year-on-year despite the 5% growth in volumes distributed.
This was obviously not enough to compensate the impact from the regulatory review in Portugal, which justified a 13% decrease on the regulated revenues. Additionally, the EBITDA from our electricity distribution activity in Spain amounted to EUR 17 million, reflecting a prudent accounting approach to possible regulatory change in the asset base of we call the RAB. That's something we talked about in previous calls, that's already incorporated. In relation to net debt, moving on to slide 18. This stood at EUR 14.2 billion in June, as of the end of June, with recurring organic cash flow around EUR 600 million, expansion CapEx also of around EUR 600 million.
Just in terms of this expansion CapEx, important to note, this includes the construction of the new wind capacity, the investment in Celesc in Brazil, and also the sale of the 20% stake in the Moray offshore wind project in Scotland. Additionally, the net debt was also impacted by the EUR 400 million reduction in regulatory receivables during the period, resulting from the sale of the tariff deficit and the securitization, and also the good performance of the electricity system debt, which also had a EUR 300 million reduction in the period. As a result, the stock of debt in the electricity system reached EUR 4.3 billion as of the end of June. Benefiting from the demand growth in Portugal and past cost cuts. I think this is a good sign of the continued reduction in the debt in the system over time.
Overall, we also paid our dividend, obviously, in May of around EUR 700 million. Overall, the net debt recurring EBITDA is approximately four times as of the end of June. Just a comment also on slide 19 around net debt issues and liquidity. The total available liquidity is around EUR 6.7 billion, including EUR 1.6 of cash and equivalents and EUR 5.1 billion of available credit line. This covers our refinancing needs beyond 2020. That puts us in a comfortable position. I think I would particularly like to highlight our bond issue in June of EUR 750 million, with a yield of around 1.67%. This is a successful issue, taking advantage of a very specific window in the market. This bond matures in January 2026.
Also the securitization of EUR 900 million between sales and securitization of EUR 900 million of electricity tariff deficit in Portugal over the first half. Again, I think also important so that we can continue to successfully place the system debt in the market. Moving on to slide 20. Here we have a 15% decline in the net interest cost to around EUR 600 million. This is consistent with the trend of the last quarter. Clearly this graph on the left-hand side, you can see consistently every semester a reduction in the net interest cost. This decrease was prompted on one hand by a 40 basis points lower cost of debt, and also by obviously lower average debt year-on-year. Moving on to slide 21.
25% decline in net financial costs, backed by the lower interest cost, which I just mentioned, and also a positive ForEx impact. There was this decrease in the net interest cost of 15% to EUR 600 million. I already mentioned that in the previous slide. There was also a positive impact of EUR 31 million from the results of ForEx and derivatives, which are essentially tied to energy contracts. Finally, just to mention in the others, a EUR 15 million gain on the sale of the 10% stake in the U.K. wind offshore project, which is part of our recurring sell-down strategy, and the EUR 15 million from bad debt related with the acquisition of Celesc, which has also been disclosed in the Brazil call. Finally, moving on to slide 22. Net profit, EUR 380 million, reported net profit.
A EUR 12 million decrease year-on-year, excluding the gas operations in Iberia, and largely justified by the EUR 66 million year-on-year decrease in EBITDA. However, financial results from associates have a positive evolution. In other words, a decrease of around EUR 76 million due to lower interest costs and a positive impact of ForEx and energy derivatives. Income taxes, EUR 19 million higher due to an increase in the effective tax rate from 15% to 16%, but still below the guidance that we provided in the previous call for the first quarter of below 20%. Overall, as I mentioned, the decline in net profits in the first half was essentially due to a decrease in the EBITDA that was prompted by the negative impact of regulatory changes in Portugal. This was more than offset by the better results from EDPR, EDP Brasil, and the market operations in Iberia.
As António mentioned, I think globally, a good underlying second quarter performance impacted by ForEx. With this, we'll conclude our presentation. We'll now take just a very brief break before we move on to the Q&A. Thank you very much.
We'll start with the questions. First question that we have comes from Philippe Aubertin from ODDO BHF. What level of tax rate are you expecting for 2018 and beyond? I'll pass the question for the CFO.
Thank you, Philippe. In relation to the tax rates, as I mentioned, we expect it to be below 20% in 2018. Then beyond, we expect it to progressively, over time, to go on increasing to what would be the sort of normal marginal corporate tax rate. Certainly for 2018, below 20%, and 2019, probably also relatively low.
Okay. Our next question comes from Jorge Guimarães at Haitong Bank and also from Stefano Marzotto from Credit Suisse on regulation in Spain. The first question is on how do we view today's news in Spanish press about the CNMC proposal? On the remuneration of electricity activity after 2020, also regarding our prudent approach, how do we see this prudent approach that we refer in our accounts, if we can relate somehow with this?
In relation to news today about the CNMC proposal on remuneration of electricity activities after 2020. I think globally, positive. I think the numbers they are indicating are certainly above probably some expectations that have been created in the past. We are comfortable that if that is the floor, that would be positive for distribution activities in Spain. Let's see, obviously, how this progresses. This is just a proposal, which still needs to be discussed with the government, it will need to be probably passed through parliament or Congress in Spain. This is still a lengthy process, I would say generally, in terms of expectations, it is fairly good news. In relation to Stefano, to the Spanish power network, given the prudent approach on regulation, what is the appetite for new government to actually leave returns unchanged?
Just to be clear, our prudent approach is in relation to the RAB, which is an adjustment that they are proposing to the assets base relating to the residual life. It's not necessarily relating to the returns. I would distinguish the return discussion, which is what I mentioned on the previous question, with this adjustment, which is currently being discussed with the government and in court on the RAB. Even if the government decides to leave the returns unchanged, that would be good news for the overall rate of return on the distribution, it would not necessarily impact the prudent approach to RAB, which I mentioned in the distributions.
Very well. Our next question comes from Jorge Guimarães from Haitong Bank regarding the regulation in Portugal. The question is regarding, there's been some comments from ERSE Chairwoman about the study on the possible compensation of some technologies in Portugal. Could EDP be affected for it? António, back to you.
Thank you, Miguel. I think that these comments were not new, as you know, they were already there at the end of last year. We were very clear since the beginning. Our positioning is EDP has acted clearly. Everything was decided, by the way. It's not a hypothesis, decided according to the law, according to the contract. In every year, it was checked and approved by the regulator. For me, it's something that we are very clear on this. We stand for what is the respect of contract and law. I take the opportunity that another question of Jorge, is it possible to quantify the impact on EBITDA from lower pumping activity from the current reduced intraday price range in OMIE pool? Just to tell you, as you know, we like volatility. Pumping likes these volatilities and differences.
It had a very limited impact in 2018, probably around EUR 10, probably slightly below. It means that in a normal world, this minus EUR 10 million in EBITDA. Miguel.
We have a question now from Brazil, from UBS. How attractive do we see the fundamentals of Brazilian markets, where do we see the major pockets of opportunity over the mid-long term?
I think that what we have seen in the recent past on Brazil is that we like the fundamentals. There are a lot of people that like the fundamentals of Brazil. Eventually, the only thing will be a competition on that market, because everybody seems to like the fundamentals. As we have been telling for the last more than 10 years, we have been consistent. What we have been doing is clearly, as we have shown in transmission, being the right moment with the right proposal to create, I think, very exciting returns for the shareholders. We have been avoiding to go into any crazy, as we did in the past, in other moments where everybody is overexcited, going into prices that don't offer, that don't make sense, like it was the case in the last auction of transmission.
In distribution, we have been also being very rational. We have been creating optionality, as we have seen with Celesc. We have also been strong in trading, positioning. We went into the solar also, sold to clients. I think that we have been proving very ambitious, but rational structure in a country that we appreciate very much since the beginning.
We have one question on generation in Iberia from Sergio Jimenez, I don't. On pumping, if it's possible to quantify the impact on EBITDA from
I've already answered Miguel.
Sorry.
First.
I'll pass now for the question on target or guidance on net debt to EBITDA for the end of the year from, I'm guessing, from Philippe or Fabian. I'll pass now to Miguel Silva.
Okay. Thanks for the question. In terms of target, I think the exact amount of net debt will obviously depend, to a certain extent, on the timing of execution of the disposals, which are currently underway. We expect the number to be in the region of 3.8, around there. As I said, that is dependent on some specific disposals that we're on track.
Okay. We have a question from Rui Dias regarding generation in Iberia. If we can take it through the hedging policy for 2018 and 2019, where do you see expected average gross margin for generation in Iberia?
Thank you for the question. I will guide you through the EBITDA guidance for this area and also the hedging position. I'll take the opportunity. Starting on first of January, in terms of reservoir, as you have seen, we were 44%, so well below the average of 61%. Now we are the opposite. We are 79% compared to 67%. All in all, the integral, as I did in the beginning, it corresponds to a EUR 15 million in EBITDA. That is still not part of the first half. Our guidance in early May already considered the strong month of April, so we have already included part of it. Whenever we talked last time, the rain was already doing very well. Improvements in hydro volumes did not come with lower prices as one would expect. Steady prices and lack of price volatility hindered the result with energy management level.
Thermal spreads were also weak. We are comfortable within the consensus of that is today at EUR 824 for 2018. In terms of hedging policy, we have for the full year today, 26 TWh already forward contracted at TTA. I would like to stress that this TTA basically, and you see on the financial handouts we talk about, corresponds to EUR 66 final price, and sometimes different players talk about different prices. We have a pair of TTA 66 that last year was EUR 55, EUR 63. This does not include around seven terawatt-hours of index volumes. Spreads locked up for 82% of coal expected output and 100% of gas. The fact that if you see the forward prices, still really not too edged for 2019, it makes us optimistic for 2019. Hopefully with this long answer, I gave you what you needed.
We have a final question from João Pinto from JB Capital regarding certificate trades. If you have any news on potential investors that you have discussed in the previous call. I'll pass to the CEO to answer the question.
Concerning this question, it does not make sense, and it wouldn't even be credible to present a business plan to the market when we are going through an offer process. When we finish this process, and independently of the offer being successful or not, we will be ready to quickly present a business plan to the market. It means that we have been doing all our own work, as you can imagine. Our internal in terms of execution of our targets continues. The company remains focused. That is very important to share with you. Everybody is focused on their business case. We have a business plan that, by the way, was presented to you until 2020. We are focused on delivery, as you see, of the budget, of the guidance of 2018. Everything is normal, and we will share it as soon as it makes sense.
We have still a few questions on more related with the tender offer, which for obvious reasons, we are not answering at this moment. Given that we don't have any more questions on strategy and on results, I will pass now to our CEO for final remarks.
To begin, I understand that not only the results were we don't have any surprises, so the questions are less than they usually are, but I understand probably you have more questions on things that we cannot share with you, of course, and it would not make sense with you today. Talking about the results, highlighting, I would like really to stress, very strong Brazil. Very strong renewables in Latin, especially full visibility on the growth, namely with all the PPAs that were signed, 1.2 gigas since the beginning of the year. I think it's an amazing result. Very strong in efficiency all over. By the way, Brazil, good in generation, good in distribution, good in creating optionality. I think it's obvious that we are doing what is expected in those markets. In Iberia, finally, a good rain.
Visibility on the regulatory issues that were raised at the end of last year. Good, sound financials. Also, the depth of the system reducing more than expected. We would clear in line for probably above EUR 700 million reduction on the tariff system. I think it's important because this gives additional comfort for reducing tariffs for next year without any new measures. Very strong demand growth in Portugal, more than 4%, driven by domestic. The structural things are there to support a smooth evolution of the system that I believe it's critical. The recent news that Miguel mentioned in Spain that were disturbing a lot of people a few months ago, I think gives additional comfort. The news of this morning was already raised in the conference call. Business-wise, we are there.
In what concerns the offer, I just wanted to tell you, we cannot talk more than I did in the presentation, but I would everybody, if you're comfortable in the sense that we are doing what you should expect, everybody should expect in the moment. We are doing what we mentioned in the report. We are working in what concerns understanding the implications of any regulatory positioning in Europe or in U.S. and all the implications that will come from that. Basically, we are doing what was expected. We will share with you, of course, when we can and when it makes sense. Thank you very much for your presence, and see you soon.
That does conclude your conference for today. Thank you for participating. You may all now disconnect.