Earnings Call: Q4 2018

Jan 25, 2019

Good morning, everybody. It's end of Q4 2018 as just been finished. It's still dark in Norway, but I'm quite happy to say and you probably know this that Skatex Solar today is actually producing solar energy every hour of the day. We're having a plant in or our plants producing in Asia, in Europe and in America. As usual, we split the presentation into 3. I take the first part, Mikael will go through the financials and I'll provide some input into the outlook and the summary. The last quarter has been exceptional in many ways for us. Operationally, we have performed very well and we have reached our best financial results ever. The proportionate number came in at SEK 1666000000 in revenues with an EBITDA of a little bit shy of 330,000,000. The high activity on the construction side manifests itself in revenue of almost NOK 1,500,000,000 and with an EBITDA of NOK 202,000,000. The gross margin is slightly above what we have been guiding on and that is expected. I mean the variation, it's not always 15%, it could be below and it could be above, it was above this quarter. We have connected in Q4 last year projects or plants in Brazil and the first of 3 projects in Malaysia. We've also started construction of a project in Argentina, a smaller one in Malaysia and a couple of projects in Ukraine totaling almost 250 megawatt. The board has proposed dividends to be at NOK0.95 per share. If you look at the year as a whole, it has been a record year for us in many ways. We have seen a strong conversion from opportunities into our pipeline, into pipeline and also going into backlog and into construction. This is a confirmation what we have previously shared with you that the market remains strong. It will continue to remain strong and it is strong in the areas of the world that where we have our, so to speak, target market. We had financial closure of 539 Megawatts and they all moved into construction. We also connected fleet solar plants that started earning revenue totaling 2 62 megawatts. And if you remember, last year at this point, we had 330 megawatt in operation. So we are in a very strong growth mode at the moment, harvesting from the investments that we have done into development over the past years. If you look at the table to the right, you can see the development from 2016 to 2018 and the revenues has gone up more than 4 times. The EBITDA 2 60 percent or 2.6 times. And as you have also monitored that the D and C revenues was quite high last year. In fact, we have never been above SEK4 1,000,000,000 in revenues from the D and C segment ever. Gross margin, as Guy did, we managed to get 15% gross margin. So the year overall in all parts both developing new business, performance in terms of execution has been running quite well. This is our portfolio and guess what is unique about our business model is that we operate in different phases. The first phase is development and construction and of course we generate revenues and we generate margin there. The margin we generate there, we will take and invest into the long term cash flows where we will have contracts lasting from 20 to 25 years. And these are the projects that today are going to be operating and earning revenues over the next 20 to 25 years, although some of them have come a little bit further down their lifetime. Mikke will show you a slide later on that the plant isn't finished and over with when you're done with your contractual life. In fact, it has a life after that. And I think it's useful for you to also appreciate that because that is taking into account in our contracts. Now we have more than or almost 1100 megawatts in construction in 4 continents and that's a challenge in itself and our operating model is really being tested, but I think that we're doing well. Egypt, fantastic project, 400 megawatt in the middle of the desert. And here we are doing something that nobody has seen at this scale. We are actually implementing bifacial modules. Bifacial means that you are actually producing electricity not only from one side where the sun ray sits, but also from the underside. So the sun rays are reflected from the ground or the desert and it hits the bottom of or the other side of the panel, boosting the yield. So we can get up to 10% more yield from an installation like that. So the 400 megawatt is the largest installation globally. South Africa in the beginning of the 3 projects up towards the Botswana border, Northern South Africa, Upington. Jocin, Mashan is left to be finished. We completed Gurren in December and we are in the final rounds of finishing Drasim and Mashan. There has been some execution issues there, but of course those are reflected in our numbers and we are well on our way in the final testing to be for these plants to be connected within a couple of months. Argentina, also quite early. This is a project that we are doing jointly with Equinor fifty-fifty, they are providing construction finance. And I just want to reiterate in this context that if we didn't have this facility, we probably wouldn't have started the project so early. So that's good. Ukraine, very interesting. Also here, I mean Ukraine is sort of not down south. I mean it's winter in Ukraine. So but we are progressing quite well. As you can see, a little bit still on the ground. The ground is not too hard, so we can actually penetrate the poles that will actually carry panels. Malaysia, this is a project that we won in a bidding phase more than a year ago. That is also has also moved into construction. Mozambique is a couple of weeks away from completion. We're doing the final testing now. So it will start earning revenue as well very soon. Then Mikael, I think you should guide us through the numbers. Thanks, Raymond. So you've already mentioned it when it comes to the Q4, but I'll reiterate. So $1,700,000,000 of revenues across our segments on a proportionate basis. EBITDA of $329,000,000 and it's basically revenues up fourfold since the same quarter last year and EBITDA up almost threefold compared to last year. And construction activity is what is driving this. We have been, as you can see here, ramping up construction significantly during 2018 and we expect that to continue to be full revenue effects of this also into 2019, obviously, with a lot of work to be done on the construction portfolio. And also I would say that power production and EBITDA numbers are increasing in the 4th quarter. It's actually up 30% year on year EBITDA on power production with more now power sales. And obviously, we will get more of this in the quarters to come. I will go through the segment results in a bit more detail in a couple of minutes. I just also wanted to highlight the annual numbers and $4,700,000,000 of revenues for the year, up from $1,700,000,000 last year and $1,200,000,000 in 2016. So we are on a growth trajectory to say the least. And EBITDA now reached for the year close to $1,000,000,000 dollars Half of it from the construction activities, the other half from the power production segment and the sale of power. And again, we will sell power for the next 20, 25 years under the PPAs. So you will see recurring business and growing business in that area. And of course, we will continue to construct power plants in the years to come. Also on the guidance for 2018, we have delivered across the board. This is a slide January last year. We set out our targets for equity returns from D and C margins, but also for power production, cash flow to equity. We have basically delivered across all of these targets. And we also upgraded our growth targets in our Capital Markets Day back in May last year, where we set a target of 3.5 gigawatt by 2021. And Raymond will also revert to how we see the market opportunities and prospects here in the last part of the presentation. Now just briefly on the various segments. Revenues in the power production segments have reached $180,000,000 EBITDA $139,000,000 And it's really now connection of Honduras, Brazil and also Malaysia that created this increase, but also the impact of us buying another 6% of the operating assets in South Africa impacted the quarterly numbers. Power production reached 108 gigawatt hours, up from 73 gigawatts in the same period last year. And this is broadly in line with the guidance that we provided for the Q4. For the full year, revenues reached $622,000,000 and EBITDA $492,000,000 Moving on to O and M. It's a bit more fluctuating. It's a seasonality in this business. And we have seen underlying fairly stable operations, but we do have some effects from the seasonal variations of performance in South Africa that are affecting the numbers in the Q4. And that's why you also see somewhat lower margin. We also see some impact of us ramping up some OpEx for this segment in preparation for O and M services that we will provide for the new plants that will be grid connected in 2019. So we'll see some improvements in these results as well, obviously, as we move forward. D and C revenues, dollars 1,500,000,000 it's now across the projects that Raymond mentioned, we recognize revenue. Accumulated progress across the portfolio that is currently being built is 43% at the end of the Q4, 15.9% gross margin. Moving on then to the balance sheet. We have invested about NOK1.7 billion of equity in 2018 and I will talk a bit more about the cash movements both in the quarter and for the year. The consolidated assets stood at close to $15,000,000,000 at the end of 2018, up from $10,000,000,000 a year ago. And it's driven by our CapEx investments. And if you look at the cash and net debt levels, consolidated cash stood at 3,300,000,000 dollars while we had $1,000,000,000 of free cash at the group level. On top of that, we have an undrawn bank facility of $500,000,000 which is giving us a robust and solid position to move forward with our projects. The group level book equity reached $3,100,000,000 and the equity to capitalization ratio stood at 81% at the end of the quarter. Now to the cash bridge. We received $28,000,000 of distributions from the operating power plants in the 4th quarter. We report $157,000,000 of cash flow to equity from the D and C segment. This is measured based on the EBITDA that we report. And we have a working capital component to the far right, which has a significant positive movement in this quarter, dollars 780,000,000 that's based on us reaching the milestones on the DPC contracts that we have in place and that basically is paid by the project companies to us and the project companies that we established, they draw on equity and on debt for the projects and then pay us under the EPC contracts. And we had a very positive movement on that front in the Q4. We continue to invest equity into new projects, $350,000,000 in Malaysia, Argentina and Ukraine. And again $1,000,000,000 of cash at the end of the year. If you look at this on for the full year 2018, we received NOK260 1,000,000 of distributions from operating power plants. The Board has proposed to pay and this is in line with our dividend policy to pay half of that cash as dividend to our corporate shareholders. That's the policy we have, 50% of whatever we distribute from our operating plans to be paid to the corporate shareholders. Then we have generated close to $400,000,000 of D and C cash flow to equity And we invested, as I mentioned, dollars 1,700,000,000 of project equity across our project portfolio. And again, we had a very positive movement on the working capital side, more than $1,000,000,000 throughout 2018. Short term guidance. We expect 2019 O and M revenues to increase to around $110,000,000 to $120,000,000 with an EBITDA margin of around 30%. The margin levels are coming somewhat down to 2018 in this segment, as I mentioned, both due to somewhat higher OpEx, but also a lower underlying margin in the new contracts, the new O and M contracts that we have entered into for the portfolio that we now are realizing. The current project under construction represents a contract value of $8,400,000,000 and the remaining value that's not been recognized here is about R4.8 billion. Most of that we expect to be recognized in 2019. Obviously, as we reach financial close for new projects throughout 2019, we will also have additional revenue in this segment. When it comes to power production volumes, we provide you with the guidance on that in a table here. This is based on plans in operation at the end of last year. So any grid connection and we will have grid connection as you know in most of our plants in 2019 that will then add to these volumes production volumes. Just to mention shortly also as well, we have implemented IFRS 16, the lease standard. It's implemented from 2019. We have some more information about this in our quarterly report. But basically, we are moving roughly NOK20 1,000,000 of OpEx. This is OpEx related to land lease and some office leases from OpEx to finance net finance in our P and L. So you can get some more information and details on that in the report. Now lastly, I wanted to touch upon and highlight a topic that we believe is important for you to understand really the underlying value of the asset portfolio. And it's referred to the post PPA value of our assets basically. And we see it in the industry now being discussed quite a lot. As you know, we have power purchase agreements covering 20, 25 years. But the technical life of the solar power plants is expected to be at least 35 years. And we have secured land rights for at least 35 years. So we have the opportunity to continue to sell power also after the end of the PPAs. The market power prices are expected to continue to increase, I think especially across the emerging markets where we operate and we have these plants. And obviously, after 20 years, the marginal cost of these operating these solar plants are very limited. We have they're fully depreciated at that time. There's no debt related to these plants. Obviously, there's no fuel costs involved and the cost of operating is limited. So our ability to generate value from these plants also after the PPA ends is significant. And I think also in the secondary market for assets, we see more and more value being attributed to this component. So we wanted to highlight that because we think it's relevant also for the valuation of our assets. So Raymond, I would want to give the word back to you. Thank you. That's very kind of you. Yes. Final lap outlook and summary. I guess this is a topic that I've touched on for the past few years. So cost of solar energy continues to come down and that happened last year as well. But there is something else happening right now. I mean we're not above every other source of energy. We're at the moment at the bottom in terms of cost per kilowatt hour produced. And that has some significant impact on the establishment, because if energy produced and the cost of it doesn't have any competition, then it actually stimulates, motivates those that depend on electricity to carry out the business to look at solar in a different way. And we see that that allows us to sort of use our imagination or rather to talk to new customers to listen carefully to them, how can we actually generate a partnership together that will allow you to tap into this low cost of energy. So it does something to the complete structure. And I'm not going to use the word revolution, but if you follow this and try to remember my words, if you follow this over the next 5 to 10 years, you will see that there will be dramatic changes to the established structure on how energy companies, the industry are actually approaching this subject. But before I move into the slide, I will debate a bit about it. Just let me dwell a few seconds on this slide. We have now reached 4,500 megawatt of pipeline. I would say this is a high quality pipeline and from last quarter it is up 600 megawatt. We have become even more systematic when we are assessing opportunities. And for us, of course, every opportunity we look at that is a failed opportunity is something we shouldn't look at. But of course not everything in this pipeline is going to transform themselves into a project that will be standing there producing electricity for the next 20 years. I mean, it's a very vibrant market at the moment and our business team is extremely busy in our market segment that you see on this slide. Now back to what I just opened with. We see several and many market opportunities with corporate off takers and there are different types of corporate off takers, some of them are big, some of them are small. If you look to the left there, it says wheeling. Well, that means that you are using a grid highway to transport electricity, meaning that you can put a plant out into a rural area and you can take out the electrons 200 kilometers away where the user is. It's not the same electron that is being produced, but the way that the system is put together is that you can actually make a transaction that allow you to take out that electricity elsewhere. This is in operation in Europe. I mean you know that you can actually buy hydropower type of electrons in Norway and take them out lighting your house in Germany for example. I mean it's the way that the energy market is operated. This allows us actually to build solar plants where the land is cost competitive and then find customers, maybe corporate customers elsewhere in that particular market, extremely interesting. But of course, you have to have a regulatory regime that allows you to do that. On the next one and that is what I call behind the meter production. It's like when you put a solar panel on your roof, you produce yourself, you store in the battery and then you consume when you need it. Excess energy, if the utility company allows you, you can actually export and get some income from the utility. So we are talking to many companies at the moment, large users in several big markets where they really see that solar is going to give them a predictable power contract that will also secure their basic business that some of them actually the cost is up to 50% of the cost just for electricity payment. So here we also see an interesting market opportunity for us. And then to the right, I mean, did you really know that 250 gigawatts of power are being produced from diesel generated engines in Africa? It's a massive amount. And they're not buying at the level that we are selling power at, it's $0.06 per kilowatt hour. They're paying $20, 25, dollars, dollars 30 per kilowatt hour, the poorest people in the world. Is that right? No, it isn't. It doesn't make sense. Of course, now we can offer opportunities where you have distributed generation, maybe some batteries, maybe in harmony with an existing diesel generator because you need to have base load. So maybe you can optimize the system. In fact, we have developed optimization programs that allows us to actually tailor batteries and solar to diesel so that we can actually show them how much we're saving. This is a tremendous market. Of course, in this instance, we're not talking about sort of the typical debt financing that we're using for big plants. We will probably put and look at a platform financing that you can finance many plants under a different type of financing scheme. But this is something that we're working on and I hope that we'll be able to share some details about that later on. Now we complain about politicians to a certain extent. I mean they're good too. But sometimes they're not showing the way. I mean they're a bit slow out of the blocks when it comes down to renewable energy and that kind of thing. Now what we see here is that these are 100 leading companies and there are many more in addition, but these are the initiative initiating companies that have decided that all the electricity that they're going to buy is going to be 100% renewable. This group has grown now to almost 200 companies and you see on the right hand side that many of these are in Europe you have a regulatory regime that I just talked about that allow you to distribute the electrons a bit more efficiently, but you see also the growing the emerging markets are going to follow suit. Now what does that do? Well, it tells the world that the serious companies are making up their mind on what to do. But it has a different effect too because in the growing economies, they want investment. They want some of these companies and other companies to invest. When they come in and negotiate, they say, well, you have renewable energy. We don't. I mean, we have some bank old type of energy. Well, sorry, man. I mean, we're not investing. So it actually will change the behavior of some of these politicians in those countries that are emerging, meaning that they will move quicker into renewables that they would have done otherwise. The good news is also that by doing that they are actually producing they had huge plans in establishing coal produced power plants. This plan is now under revision and it will be replaced by to a large extent by renewable energy. We have Skatex Solar has a growing number of shareholders that are asking us about sustainability and how we fare. And I've decided that since this is sort of the yearly review or presentation as well to share with you a couple of slides that gives you a bit of a view into our sustainability report that will also be published to the market along with the annual report. So this is actually a part of how we drive our business. We work extremely closely with the local communities and on Honduras. You know that we had some issues there and they were largely connected to a situation on the ground where we didn't fully comprehend on how to interface with the local community. We spent a lot of money to sell, but more importantly, we spent a lot of time actually interfacing with community and making sure that they could trust us. I think I mentioned this before, but I mean some of them thought they would get cancer from solar panels that the solar panels consumed all their water. Of course, it didn't. But of course, this is the world that we're in. So this has actually come out as a very successful initiative from us. In Mozambique, we also implemented a livelihood restoration program, 220 households and this is in line with IFC performance standards. I mean those are the standards that we apply to all our projects, all the projects that is being built together. We have 400 Also here, we have spent a lot of time in actually bringing our performance and how we work on our programs up to a very high level or high level. And it has been a success and in fact I got the message this morning that we just passed another inspection because we are being expected. We're not doing this in isolation. Lenders, partners, everybody is making sure that because they have the same interest that we are performing well. 6 1,000,000 hours, man hours or hours across 10 projects in 9 countries was actually produced last year. Lost time incidents 3, that's 3 per 1,000 100,000 hours, sorry. And we created 6,000 jobs. So I mean, some of these people will have learned a skill set that will allow them to earn income for their families later on as well. They've seen that in Africa or in South Africa and maybe 80% of these 6,000 people were unskilled. They haven't worked before. So, and I mean we're used to HSSE in the North Sea. I mean you have blue color, white color, you have workers, you have office people. Workers in Norway are different from unskilled workers in Africa or in South America. I mean, they haven't done it before. So you need an extra effort to make sure that you're actually taking care of these people, so they don't get hurt. Now to this slide, transparency is essential. So that's why we have really, last year, increased our efforts into this area. We have signed an agreement to be a member of the UN Global Compact Initiative. It covers human rights, labor, environment and anti corruption. Secondly, climate reporting. We are this will be in May reported the carbon disclosure project and that is a standardized reporting platform. We call all aspects of sustainability and it will be available for you and every other stakeholder to look into. And you should compare from year to year to see that we and you should expect us to improve. We have maybe as one of the first companies in Norway, we assigned to the UN sustainability goals. We have selected 6 or 7 of those that we are actually comparing ourselves to. It's also covered well in our sustainability report. And then finally, there was a ranking made by 100 largest listed companies in Norway. We ended up among the top 15 and we hope that we can actually move up on that list next time we're being evaluated. So to the final slide. I mean the performance is I think it has been a good performance and the results as Mikael showed you, our financial results are very good. In operation, 584 under construction, as I told you before, 10.71 megawatt and backlog 225. The pipeline has increased by 600 megawatts and if you look to the right, we guided in June to be up to 3,500 megawatt in 2021. We're up to 1700. So we have to add to reach that goal or even outperform that goal, who knows, add another 1800 megawatt to reach 3,500. The 1800 megawatts are going to come from projects that is in the 4,454 Megawatt pipeline. So it's about 1 third that we have to bring into financial closure and build. Of course, the pipeline is not static. This pipeline, we just increased by SEK600 last quarter, right? So it means that it's not going to be staying at this level. So hopefully, it will be movement and moving to backlog construction. And we have a backlog on the construction side of 4,800,000,000 as Mikkel said. On the D and C side, of course, new projects that are being financially closed will move into construction and will add revenue to the D and C segment. So growth is essential for us. In fact, these 4 blue bullets are the same bullets we showed as being the pillars for success over the next few years and we'll put in some information below that. Now on the third one, we're saying that 2019 for us is going to be a breakthrough year with regards to corporate PPAs. Then finally, we have talked about this a few times before, looking at how to create additional value to optimize the financing of the asset portfolio and enhance value. And it only makes sense for us to do that if we can actually create a value that is over and above what we would have expected. So and of course the larger and the more coordinated the portfolio is, the better chance you have is to get a very good pricing for it. So we're working on that as well. So I guess that concludes my presentation and we are more than happy to take questions from you present here and from the almost at the grid, I mean, the net. Congratulations on the very strong 2018. Just regarding the pipeline, right now, I guess it's about converting pipelines to backlog as well in 2018. You mentioned corporate PPAs. Could you just provide some color on the development of the South African pipeline and the Kazakhstan pipeline and the Vietnam pipeline? What was the middle one? The Kazakhstan. To take the middle one first, the Kazakhstan pipeline is not really moving. So we are not prioritizing Kazakhstan for the time being. And on Vietnam? On Vietnam, we are working on several projects. I think Vietnam, as I just indicated, you will see a growth, I mean, a fairly strong growth within renewables due to the fact that they are in desperate need for more electricity and they do not want to build too many more coal fired power plants. So you should expect us to come up with some more projects there and that's a part of our pipeline, projects in Vietnam is a part of our pipeline. Regards to South Africa, I mean if you follow the South African news, which I do every day, engineering news by the way is a good site, You see that they are just about to publish their new energy plan. The previous plan under President Zuma had nuclear. I think that has disappeared. Renewable will take a more prominent position. South Africa for us is a whole market. This is where we really made a difference by building the first project for Africa, the largest and for ourselves. So we have a big pipeline of projects, very competitive projects at the right locations, meaning that there is capacity and a grid to receive our electricity. So for us, we're extremely hopeful. Good news from Davos from the Minister of Energy as well being very positive about the energy situation in South Africa. They have an EC with Eskom that they have to sort out. That's not really our problem really, but very optimistic. Do you expect around 5 to take place in 2019 in South Africa, the round 5 I mean, I'm not I mean, I follow South Africa, but I'm not a South African politician. So they have to go through this. But we think so based on what I mean, we didn't think so last year in the beginning of last year, but now we think so. It's been very good positive news flow from South Africa over the past few weeks. And the final question, is it possible to mention some country names in the new 600 megawatt pipeline? I'm sure it's possible. I'm sure it's possible. Well, maybe you should hold your horse a bit, but there are certain number of countries in the world and I think also to add, there is new opportunities within existing markets as well in that increment. Thank you. Preben Ascolson, Carnegie. Interesting to hear more about the terminal value you see out there and just a few questions. First, can you give us some reasoning behind why you think the market prices will continue up given that all the new capacity coming on stream is really you and wind with declining prices? And also what do you need to put into the plans to make them operate for 10 more years? What kind of CapEx should we expect for having 30 instead of 20 years of production? To take the I mean the panels stay last and there are projections and even guarantees that go beyond the 20 original years, 25, 30 years. So that is not my concern. What would normally what we would normally take us as an operating cost is the inverters. They have a certain lifetime and you have to replace them. You have to put that into it. And then Mikael may want to add something to your first question and that is, we expect the power prices to go up. It doesn't mean that we assume that power prices should go up for us to make this a good business case. Our marginal cost is 0 plus. I mean, it's not much. So we think that we will be competitive with any other type source of energy because we don't have a few costs. We have a few guys running the plant and as you indicate, I mean some inverter costs and that kind of thing. So we will be very competitive. And remember, all the loans and everything else is paid off. So we'll be flexible. And I think it is going to be quite profitable, but I mean that is yet to be proven. Yes. No, I was just going to say that, of course, we agree that there will be a lot of growth in solar and wind in the years to come. And the question is, of course, that will be the technology then. Setting the price of power in any given market in 20 years is, of course, a bit challenging to answer that question. But there will be of course, we believe that we are not going to set the price with our portfolio or with our with a solar that will probably not be the price setter. We also see I think you mentioned, I mean, we see transactions out there in market where the life after the initial PPA is actually put into as an element in pricing. In fact, that was done when we sold our Utah plant. Give us some more flavor on kind of when can we expect some news, in which geographies and the magnitude of those projects typical and how much could I move the needle financially? I'm not sure if I want to share with you where we're actually negotiating, but they are in fairly substantial markets. The contracts may be in between 50 to 200 megawatts. So they are substantial, I mean, utility scale. The difference here is that, I mean, when we're in the past, we have said, okay, there is a PPA, there is a 20 year period and there you go. And we don't really need to understand the customer. Just need to understand that they will be able to actually take the electricity we'll use and then distribute it to whoever consumes. When you talk about corporate PPAs, you have to listen carefully to the needs of your customer. Number 1, they may not want to enter into a 25 year contract. They may have a different business cycle that they're in. So you have to understand that. There could be tax or write off situations or I mean any particularities linked to that company that drives their decision behavior when they're moving into a contract. And also you have to show them some comfort with regards to how the general market is going to or is expected to behave when you're entering into contract. So putting all that into perspective and then implementing it in agreement that we could live with and that they can live with is a challenge. But I think we have found ways to do that, but it will vary from customer to customer. And the PPAs will also not with 20 years, it's probably shorter. So you could have an element of hedging there. I mean different things that is going to reduce our risk, but still give the customer the opportunity and some flexibility when they enter into a contract with us. We have a question from the web from Peter Nystrom in ABG. How should we expect working capital to develop in the first half of 'nineteen and for the full year 2019? Yes. We will continue to be very active on the construction front throughout 2019, as I mentioned, and of course also to do in the years to come. But and then specifically on the first half of twenty nineteen, I think we'll be fairly stable from a working capital perspective, Probably some reversal or some of those positive movements we've seen later in 2019, that would be how we see things at the moment. Thank you. Per Watley in for Nordic. Back to the corporate PPAs. A few companies, they argue that if we are producing our own power, it can be in different country and then in effect, we will be energy neutral. So how would you I mean, based on your discussions, would you say that your discussions are with clients that would like to produce in a physical way, like it's the same amount that we produce and we use? Or would it mean more flexible? Do you understand the question? Let me try and then you can correct me if I missed the point. You don't I mean you can have a facility that produces more than the one that you enter into the contract with is requiring. So that's a part of the picture. We you will be able to sell a part of that to the open market. Then you have to understand how that behaves and you put that into the mall, you risk it as well. So I'm not sure if that's what you asked about. Yes. It's about how willing are they to take on more amount than they use physically at that site. So and does it has to be a link between I mean, they can have consumption in Europe and then in Asia. And then if they build one big plant in Africa, then the net position on energy will be neutral energy neutral for plants, where more physical is. The regime isn't like you can exchange electrons from Africa to Australia. But I think on a carbon, we call it carbon rainskop? Yes. I mean, if you are reporting us as a company, how you are actually if you're carbon neutral globally, of course, you can add those up as a management account. But you can't really, at the operating level, get the same kind of thing. So yes, you can get benefits from that and I think a lot of companies do. Okay. Very good. It doesn't sound to be look to be any further questions. So thank you. Thank you very much for your attendance.