Good morning. My name is Pam, and I will be your conference operator today. Welcome to the Canfor and Canfor Pulp Q2 Analyst Call. All lines have been placed on mute to prevent any background noise. During this call, Canfor and Canfor Pulp's Chief Financial Officer will be referring to a slide presentation that is available in the investor relations section of the company's website. Also, the company would like to point out that this call will include forward-looking statements, so please refer to the press release for the associated risks of such statements. I would now like to turn the meeting over to Mr. Don Kayne, Canfor Corporation's President and Chief Executive Officer. Please go ahead, Mr. Kayne.
All right. Thanks, Pam, and good morning, everyone. Thank you for joining the Canfor and Canfor Pulp Q2 2022 Results Conference Call. I'm gonna make a few comments before I turn things over to Kevin Edgson, Canfor Pulp's President and CEO, and Pat Elliott, Chief Financial Officer of Canfor Corporation and Canfor Pulp, and our Senior Vice President of Sustainability.
In addition, we are joined by Kevin Pankratz, our Senior Vice President of Sales and Marketing. Increasingly, when I meet with members of the investment community, with customers and partners, sustainability is at the top of the list of topics to discuss, and it should be because it's critically important to all of us. We are in the second year of our ambitious sustainability journey. Sustainability is core to our strategy and is becoming increasingly embedded in all areas of our business.
At the end of June, we released our 2021 sustainability report. A few highlights for the year including setting our climate change goal and targets, planting 54 million seedlings, having 80% of our energy come from renewable resources, and having 20% of our new hires come from underrepresented groups. Our employees across the company have demonstrated that they are committed to achieving our sustainability goals and targets, and we sincerely appreciate their hard work and dedication in developing a very comprehensive report. We will continue to keep you updated on our sustainability progress.
Turning to our financial results, despite ongoing supply chain challenges which resulted in reduced operating rates in Western Canada, our lumber business benefited from strong North American lumber prices early in the quarter, increasing shipments reflected improved transportation networks in June, and a full quarter of production from our recently acquired assets from Millar Western. Our European lumber business continued to generate strong financial results with improved sales realizations reflecting solid demand in that region. While lumber markets saw significant volatility in the Q2, lean inventories throughout the supply chain and solid underlying demand fundamentals have supported improved markets in recent weeks, with current North American lumber prices trading well ahead of pre-pandemic levels.
While rising interest rates and inflationary pressures are likely to temper lumber demand in the near term, market fundamentals remain supported by solid underlying demand in the repair and remodel sector and pent-up demand for new home construction in the United States, particularly. Notwithstanding the current macro environment, we remain focused on growing our lumber business on a global basis and believe our diversification strategy will support our financial results throughout the cycle.
Yesterday, we announced plans to construct a second state-of-the-art greenfield sawmill. This $210 million facility is aligned with our sustainability goals and decarbonization targets and will have annual production capacity of 250 million board feet when completed in 2024. Following the construction and startup of this facility, we will have an orderly wind down of our existing sawmill in Mobile, allowing us to maximize cash flows during construction.
All of the employees at our Mobile plant will be offered jobs to stay with the company. In addition to this new facility, we have made significant capital investments in the U.S. South in recent years, including an organic growth program completed in 2021, ongoing construction of our DeRidder greenfield sawmill and planned investment in Urbana. Together, these investments significantly improve our cost structure to grow our production capacity in the U.S. South by approximately 800 million board feet through increased automation, innovation, and manufacturing flexibility with a focus on high-value products. Notwithstanding our recent acquisition of assets from Millar Western and a number of significant capital projects planned through 2024, our balance sheet remains strong.
While we are prepared to remain patient and disciplined until the right opportunities present themselves, we are well-positioned to grow our lumber business on a global basis and continue to review a number of additional internal and external growth opportunities. With that, I'll now turn it over to Kevin to provide an overview of Canfor Pulp.
Thanks, Don, and good morning, everyone. Results in the Q2 continued to reflect the impact of significant transportation challenges as well as operational downtime at Northwood as a result of capital upgrades to RB1 and scheduled maintenance turnaround, which was successfully completed in July. While transportation networks improved slightly towards the end of the Q2, we continued to closely manage inventory levels at our mills as we work to optimize available transportation.
Supported by strong global pulp pricing, we anticipate improved results in the Q3. However, we are prepared to adjust future operating plans to match available logistics. Despite significant challenges in recent quarters, Canfor Pulp has preserved its strong balance sheet. As a management team, we remain focused on improving operational reliability, closely managing inflationary cost pressures, and optimizing available transportation as we look to capitalize on strong pulp markets. As Don mentioned, our 2021 sustainability report was recently released. Canfor Pulp is actively engaged in our sustainability strategy, and it's important to our communities and customers, and it's important to us.
Canfor and Canfor Pulp have committed to set near and long-term company-wide reductions in line with achieving net zero emissions. Our targets will undergo validation with the Science Based Targets initiative within the next two years. Our Canfor Pulp leadership team has been focused on reducing our carbon footprint for the last couple of years, and we are assessing several initiatives that will have a meaningful impact on reducing our carbon emissions. I will now turn it over to Pat to provide an overview of our financial results.
Thanks, Kevin, and good morning, everyone. The Canfor and Canfor Pulp quarterly results were released yesterday afternoon and come together with our overview slide presentation in the investor relations section of the respective company's websites. My comments this morning, I'll speak to quarterly financial highlights, a summary of which is included in our overview slide presentation.
Our lumber business generated operating income of CAD 552 million in the Q2, reflecting continued strong results in Europe, increased shipments, and the benefit of strong North American lumber prices early in the quarter. Our lumber business also benefited from a full quarter of results from our recent acquisition of Millar Western in Alberta. Our European operations contributed approximately CAD 190 million of EBITDA in the Q2, with improved pricing offset in part by increased manufacturing costs and a 5% stronger Canadian dollar.
As Don mentioned, North American lumber prices saw significant volatility in the Q2, with results reflecting a sharp decline in lumber prices as the quarter progressed, as well as the impact of ongoing supply chain challenges and related downtime in Western Canada. Transportation networks improved marginally toward the end of the quarter, supporting a reduction of finished inventory. Looking ahead, we anticipate a more challenging Q3, in part reflecting the timing of market-based stumpage adjustments in British Columbia, the impact of ongoing supply chain challenges, as well as seasonal downtime in Europe.
Our pulp business had an operating loss of CAD 8 million in the Q2, an improvement of CAD 18 million quarter-over-quarter. Q2 results benefited from significantly higher sales realizations and increased shipments, however, continued to reflect the impact of reduced production at Northwood and increased manufacturing costs, as Kevin mentioned.
With the maintenance at Northwood completed in mid-July, we anticipate a solid Q3, supported by improved operating rates and strong global pulp pricing. Capital expenditures were approximately CAD 113 million in the Q2, including spending on our Greenfield sawmill, which continues to be on schedule to start up in early 2023. We are pleased to announce our intent to build a second Greenfield sawmill. This investment, combined with our new sawmill in Louisiana and planned investment at our Urbana, will significantly improve our cost structure and manufacturing capabilities when completed in 2024. In addition to these investments, we've announced a number of additional growth initiatives in the last year, including successful acquisitions in Alberta and in Europe. Together, these investments total approximately CAD 1.1 billion and improve our product offering, cost structure, and geographic diversification.
In addition, we resumed repurchasing shares under our NCIB in June and have spent approximately CAD 65 million to date this year. Looking ahead to 2023, we currently anticipate capital spend of approximately CAD 500 million for our lumber business, and subject to market conditions, approximately CAD 78 million-CAD 80 million for Canfor Pulp, including major maintenance. In addition to an expanded capital program, we continue to look at additional organic and external growth opportunities and plan to continue repurchasing shares under our NCIB. In terms of our sustainability reporting, we continue to increase our transparency.
With our 2021 report, our disclosures were aligned with the Task Force on Climate-related Financial Disclosures and the Sustainability Accounting Standards Board standards. In addition, as part of that TCFD process, we completed a readiness assessment to understand our progress relative to our peers. We will continue to monitor any future proposed standards to ensure we integrate them into future reporting years. With that, Don, I'll turn the call back over to you.
Thanks, Pat. Operator will turn this back, and now any questions from analysts. We look forward to speaking to them.
Thank you. We will now take questions from financial analysts. If you have a question, please press star one on your telephone keypad. If you're using a speakerphone, please lift your receiver and then press star one. If at any time you wish to cancel your question, please press star two. Please press star one now if you do have a question. There will be a brief pause while participants register for questions. Thank you for your patience. Your first question comes from Hamir Patel with CIBC Capital Markets. Please go ahead.
Hi, good morning. Don, with the deterioration that we're seeing in the housing fundamentals, are you seeing any moderation in price expectations from some of the vendors that you have conversations with for M&A in Europe or the U.S. South?
Wanna talk about that a little bit, Kevin?
For M&A?
What was it, M&A? I missed the last part.
Yeah. In terms of, you know, if vendor expectations have moderated at all.
Oh, yeah. I don't think we're seeing too much of that moderation at all, Hamir, to be honest with you at this point anyway.
Okay, fair enough. When you look at the opportunity set, do you see more opportunities in Europe or the U.S. South right now?
I think, you know, both. I think for sure in Europe, we're seeing some here recently. Some that we've been, you know, looking at for a while, and there's some recent ones as well. Definitely there's opportunities there. In the US, increasingly we're seeing a few more. I think, you know, as we go forward here over the next, you know, next 12-24 months, we expect to see even more, after a fairly extended period of not a lot of activity.
Great. Thanks, Don. Just turning to the demand side, with your you know, key big box customers, how do you see that demand shaping up into 2023? Because clearly new res is slowing, but I would imagine that, you know, there might be some benefits there. People are kind of stuck in their homes. How do you see RNR faring, as you move into 2023?
Sure, Hamir, I know Kevin's done a fair bit of work on that, so I'll let you speak to that, Kevin.
Sure. Good morning, Hamir. Yeah, maybe I'll just sort of start just now and then and move into 2023. I think it's been reported that we're seeing pretty solid, I would even say unseasonably strong RNR demand throughout the country. I think while there are some drivers that are maybe contrary to that with you know, interest rates and affordability, but there are still some key drivers in that segment like the age of old homes, the equity that people have in their homes that are gonna support, I think, some solid takeaway going into Q3.
A big question is, of course, the impact of inflation and interest rates that it's a bit of an unknown at this point. I think there's not a ton of guidance going beyond 2023 but suspect that it might be a bit more challenging as we go into that period. We've been from what we've seen to date, the demand and takeaway have been pretty solid.
Great. Thanks, Kevin. That's helpful. Just the last question from me on the pulp side. Kevin, you know, we saw Stora Enso recently announce plans to commercialize a lignin-based battery. Are there any initiatives, you know, on that sort of battery front that you might be looking at, just given all this government support that seems to be available in that market?
Thank you for the question, Hamir. I'd like to really respond on the bio innovation side in its entirety. I think today is a pretty exciting time in the world in terms of the opportunities that come out of fiber-based or biomass opportunities. Canfor and Canfor Pulp are exceptionally active in that space, determining not just what the options are, but what are the ones that offer the best probability and profitability going forward. I can't speak specifically to a battery reference, but I can tell you that there are some very exciting opportunities that we're looking at, including our work around some biomass conversion that's going on in PG right now.
Great. Thanks, Kevin. That's all I had. I'll get back in the queue.
Sure.
Your next question comes from Sean Steuart with TD Cowen. Please go ahead.
Thanks. Good morning, everyone.
Good morning.
Question on the Alabama sawmill. The capacity multiple looks to be in line with other recent greenfield announcements, but it's about 30% higher than what you're paying for DeRidder based on the most recent CapEx guidance for that project. How do you think about returns for the Alabama project? And how do you benchmark those potential returns around or against M&A opportunities or share buybacks when you're thinking about the relative attractiveness of those investment opportunities?
Yeah, for sure. We can certainly talk a bit about that for sure. You're absolutely right. We figure it's about, you know, 25-30% more than what we paid at DeRidder. A good chunk of that, of course, is due to some of the cost increases we're seeing across all businesses when you talk about energy and talk about labor, those two probably in particular, but there's a lot more than that. Those two probably constitute the bulk of that. Really when we looked at that area, Sean, it was an easy decision. It's one we even looked at for a while.
You know, the Mobile sawmill is downtown Mobile, and we know long term that that doesn't work for a lot of these communities these days, number one. More importantly, the strategic opportunity there due to the fiber in that area is unique. We've spoken about that before, I believe a few of us maybe have. There is some species differences down there that we really wanted to capitalize on. We needed to capitalize on because not a lot of areas in North America have that ability. That was key. The customer base in the area is very attractive to us, has been and will continue to be. You know, we consider that as well.
Aside from just the financial opportunity down there, it really comes down to the strategic opportunity there that we really felt we had to do something. That was all, you know, part of that decision and why it's jumped up in the queue, I guess, so to speak, over some of the other projects.
Any context on return benchmarks you're targeting for that project?
Yeah. Pat, we don't normally disclose that, but you want to-
Yeah. No, Sean, I mean, I think it's in line kind of with what we've disclosed before. You sort of asked about the, you know, our NCIB, and we continue to try to have a balanced approach. We're a little more active on the NCIB this quarter. We really feel the strategic imperative of the diversification by region and by product, you know, in the long term is gonna benefit us. In general, the returns are in line with what we've seen in other projects.
Okay. No, I get it. Second question, Europe, very impressive results again there. You referenced seasonal slowdown expectations for the Q3. Is that more volume-based or are you starting to see some price erosion in that market? It's a little more opaque in terms of price discovery there. Can you give us some qualifiers around what you're seeing in that market specifically?
Yeah, for sure. I think a couple of things. Certainly on volume, we've had the typical July reductions in volume that you see in, well, really across Scandinavia. That'll have definitely an impact. In talking with those fellows there quite a lot here recently, clearly Q3 not so much concern about Q3 should be relatively stable. We'll see log costs, you know, slightly up probably, and conversion costs a bit up for the same reasons that we've seen in other areas. For the most part, it's Q4 really when we're starting to, you know. There's still a lot of, you know, uncertainty I think everywhere in terms of what, you know, what it's going to look like there.
I will say though, the big offset and we don't know at this stage yet what the impact's going to be, but it really comes down to the impact on the embargo on Russian imports into Central Europe, which began on July ninth. Our folks don't believe that we'll really see the impact of that until it's gonna take six-eight weeks for that. You know, that's towards the tail end of August into September.
Clearly that conversation is becoming much more topical now across our customer base in Europe, and elsewhere too for that matter, is what that impact's going to be and frankly, where some of that lumber gonna come from. That's, you know, to what degree that offsets some of what I spoke about for Q4, not sure at this point in time, but it will definitely have some impact for sure in a positive way.
Yeah. Understood. Okay. Thanks very much, Don. That's all I have.
Good one. See you.
Your next question comes from Mark Wilde with BMO. Please go ahead.
Thanks. Good morning, Don, Pat, Kevin.
Morning, Mark.
I wondered, Don, just to come back to Europe, you know, what can you tell us about the impact you've seen to date from the war in the Ukraine and how that's affected lumber markets? Has it been more of an effect than you expected or less of an effect than you had expected?
I think probably less than I expected, but I think right now, up to now, it's been relatively benign. I think why is that? Part of the reason was I think that initially there was a bit of a misunderstanding, I think to some degree everywhere in terms of when those embargoes took effect. Originally, I think it was a lot of talk about that being in early June, when in fact it was early July to start with. Then the lag time for that real impact of that reduction in production and imports coming into Central Europe. I think that's caused a delay in the impact.
Like I was just mentioning, I think that, though, you know, it'll be the lag from what our folks have told us is gonna probably be six-eight weeks. That'll again be towards the tail end of August and September before we really see that. Up to now, it's been a relatively benign impact. That would be our view right now.
I'm just curious, Don. Like I've heard from some European producers that a lot of the Russian wood that came in was not necessarily high grade kind of construction lumber. It's, you know, might not be a kind of a direct one for one. Can you put any color on that?
Yeah. There's definitely some truth to that for sure. But there is also a good mix of some of the higher quality products too, particularly in red pine. You know, to what degree, I don't know exactly. But you know, overall though, there's definitely you know, going to be an impact in the amount of like logs and lumber, but mostly lumber coming into Central Europe for sure. Kevin, if you wanna add.
Okay. All right.
Or anything more from-
No
from some of your contacts.
I think that red pine comment is what I hear. Some of those go to some different markets like lamstock and packaging and crating. I think that's maybe one segment where you're seeing a bigger impact. With all the planing facilities like in the Baltics that are starving for wood like in Latvia and stuff like that's having some impact.
Yeah, yeah.
Okay. Don, just turning to the balance sheet, you're sitting on, you know, about $10 a share in net cash. You know, how are you thinking about the use of that position? You know, what would you suggest as kind of a, you know, a reasonable timeline for us to think about you using that in?
Yeah. Well, I mean, I think, you know, no question. I'll let Pat add to this, but we've spent, as you probably know, about CAD 1 billion last year alone with Millar Western. When you look at DeRidder and Urbana and then, you know, the announcements here recently, Vida Timber in Sweden, of course, we had a small acquisition there as well. When you look at all of that, you know, that's at least for now anyway, that's what we're looking at. Over and above that, you know, there's certainly some other projects that we are looking at, and they're active. We're looking at a couple of areas too on the M&A side, both in Sweden and also in U.S. Southeast.
You know, over and above that, we're, you know, we have the small buyback, share buyback program, as you know. So when you look at all those combined and you kind of factor in as well with some of the uncertainty in the marketplace overall, we think we're in terms of where we're sitting right now, where we think is pretty prudent. Pat, is there anything you wanna add?
You know what, Don? I'm just curious. Yeah, go ahead.
Pat, do you wanna add anything there?
Oh, no. I mean, Mark, yeah, like, I think it's hard to give you a timeline. As Don says, a lot of opportunities out there. You know, we're gonna continue, I think, with a relatively smaller buyback than others. I think the opportunity around the diversification in these other regions is gonna have an outsized benefit to us. You know, we'll continue to, I think, be patient here.
Yeah. Don, would there be anything for you to do incrementally in engineered wood? 'Cause I think you have kind of a modest size engineered wood business.
Yeah. No, good question. That's certainly on our radar, has been for some time. I think that our sales guys, and Kevin, you can talk about specifics, but without getting too specific, maybe you qualify that. We've looked at ourselves right now as a custom supplier to that industry and really done a lot there and, you know, really advanced some of the customer base and so forth. Taking that next step in terms of vertical integration, what you referred to, is certainly something that I think's
Not only prudent for us, but I think prudent for the industry, because I do think in North America, the opportunity for some of the mass timber and the components of that are equally as good as they are in Europe. We're just behind the eight ball a bit here more, Kevin, in North America.
Yeah.
than we are over there.
Right.
The opportunity is just as strong. You can maybe.
Yeah.
Touch on a little bit of specifics, if you like.
Yeah. Sure. Mark, for sure, it's a really interesting space. I think, you know, my recent understanding, even on mass timber, is that the pace of adoption is actually maybe a little ahead of schedule from what we would have earlier forecasted. I think capacity with existing mass timber facilities are tapping out and there's a need for more capacity. Obviously it's a interesting space for us, and we do see it as a future space for our play and a new market segment that lumber will go into.
As you know, we have two lam facilities in the U.S., one in Washington, Georgia, the other one in Arkansas, that we're looking at opportunities to diversify our product mix and to expand and then pursue other opportunities if should it arise. Definitely an evolving segment for us that we'd like to get more involved with.
All right. The last one from me, I just wonder whether, Kevin Edgson wants to just provide us with kind of any early thoughts as he's kind of starts digging into Canfor Pulp about sort of, you know, the focal points or the, you know, prospective opportunities he sees, and also how you're thinking about just sort of the fiber issues in Western Canada as it affects those pulp mills. Go ahead, Kevin.
Okay. Thanks, Mark. I think I'd start off with the initial assessment in terms of the organization is that it is a good organization with some solid people behind it. We've got a challenge with reliability driven largely by the logistics challenges that are there. We've also had the investment in RB1 earlier on, the turnaround at Northwood in the spring, and one coming in Intercon. All of these create an upset condition, which makes it difficult in terms of the operating conditions, but also on people as they try to drive towards optimizing the asset. I think we'll see some more stability once we get through the Intercon shutdown, if we can see a return to more normal logistics flow.
On a go-forward on the fiber side, I think, it's not surprising to anybody there's been, you know, curtailments on the solid wood side. There haven't been curtailments outside of our Taylor asset, on the pulp side. There's also a healthy opportunity in terms of whole log chips and the ability to supply the mills there. We're continuing to look at what the mills are capable of doing, what the fiber supply is, what the economic fiber supply is. I don't think at this stage we're anticipating any significant change outside of the Taylor assets.
Okay. All right. That sounds good. I'll turn it over. Thank you.
Your next question comes from Paul Quinn with RBC Capital Markets. Please go ahead.
Yeah. Thanks very much, guys. Maybe just start, just clarification. You guys have talked about this reduced operating rate in Western Canada. Is that just BC specific? I suspect you're running your Alberta mills full.
Yeah. Basically, that's correct. It's mostly BC. We probably had a little bit of a hiccup or two here in Alberta, but for the most part, it's focused on British Columbia.
Maybe Kevin, if you could take us through, you know, you're new to Canfor Pulp, and I appreciate the overview, comments on the organization. What do you think about the mills themselves? If you can take a sort of a deeper dive through each of the facilities, the pluses and minuses on them, or you know, where do you see positioning these facilities over the next five years?
Paul, I think there's a couple different business elements that need to be recognized. Our specialty paper business is really solid, and we're very comfortable with that. Likewise, with our unbleached kraft business, we've positioned that in a, you know, some specialty markets, tried to avoid the commodity side of the business as much as possible. That speaks largely to the PG and Intercon combination. We are looking at some of the investments that we're gonna have to make to continue to meet the performance there. We like that side of the business, which then brings us back to the NBSK side of the business. What we see there is that Canfor Pulp has positioned itself and will continue to do so as a specialty product or supplier within a specialty product.
We are able to make a very high strength NBSK, higher than the general case. We'll continue to leverage that. To continue to do that in a reliable fashion, we're likely going to have to step up to a steady capital, you know, sustainable capital investment in those facilities. That's gonna be moderated by the market conditions. We like where our balance sheet is today. I'm not excited about adding any form of debt. What we'll do is we'll balance the market conditions with investment opportunities that are really driven around improving sustainability in our place in the cost curve.
Okay. Yeah, no, I really like that, especially paper business. I sort of value that at CAD 100 million. I just don't understand what do you think investors are not seeing in the pulp business to value it, you know, where it is and you know, how do you expect to increase that awareness going forward?
I think, you know, the way we'll get the attention of the investment community is to get to a more regular operation where we've got reliable results that represent the market conditions that are in place. We really need to focus on the performance of the assets we have and the condition that they are, and continue to look for good opportunities to invest, both in terms of people and assets.
Okay. Maybe, Don, turning back to you, just, you know, you've been out there for a while now, and know just about all the players in North America on the softwood lumber file. Not that you need the cash, but I'm just curious as to what sort of things need to occur to, you know, broker a deal between each side, and is that something that Canfor's pursuing?
Yeah. I mean, good question, Paul. I mean, I think, you know, we've had a number of meetings probably over the last, you know, I don't know, four to five months. But at the end and you've heard, of course, probably that our minister of foreign affairs or trade minister, excuse me, has had some meetings with USTR, with Katherine Tai, and with Commerce and all of that. It came across pretty optimistic. But when at the end of the day, our view is it's we haven't really made any progress. I think it's a lot of talk, which maybe is always good. We've heard, you know, some of the comments from NAHB and other consumer groups and so forth.
I guess our view, despite all of that, I still think it's very hard to get this topic on the radar screen on either administration with all the global events going on. It's been tough before, never mind now. Our view would be collectively, maybe even from an industry point of view, that, you know, it's still a ways away in our view before we make any actual progress there. You know, I will say though, I mean, it's not to say that we are not all, you know, talk about it and understand company by company what we think would be acceptable if we ever did get to that.
You know, just to be ready if we do get asked to get involved again by either of the governments. Right now, I still see that as, you know, as not something that's really on the radar screen in a big way and, from either side, either U.S. or from Canada.
Okay. Can you share any updates on where we are in the WTO or NAFTA processes to be able to, you know, maybe force this resolution?
Yeah, I know in both cases, not really any progress there either. You know, I wouldn't even be able to comment on that. You know, it's got. We talked about that. We had our lawyers from Washington in and gave us an update, all the BC Lumber Trade Council group about maybe six weeks ago. Really from their standpoint and including the sunset clause and all the different things you hear about, really, nothing's really expected to change materially on any of those fronts right now, from what I understand.
All right. That's all I had. That's luck, I say.
Thanks, Paul. Good to talk to you. See ya.
Thank you. There are no further questions. I'll now turn it over to Don Kayne for closing remarks. Please go ahead, Mr. Kayne.
Yeah, thanks. Thanks, operator, and thanks to everyone for joining the call this morning. We'll look forward to talking to you at the end of Q3, and have a good rest of the summer. Thank you.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.