Earnings call transcript: ENCE Q1 2025 sees revenue dip, stock drops 4.5%

ENCE reported a decline in revenues and profits for the first quarter of 2025, leading to a 4.51% drop in its stock price to €3.22. According to InvestingPro data, the stock is now trading near its 52-week low of €3.05, though analysts maintain an optimistic outlook with price targets ranging from €4.21 to €5.35. Despite strategic initiatives like launching Europe’s first fluff pulp line using eucalyptus, the company’s financial performance fell short, with group revenues decreasing by €17 million and profits by €1 million year-on-year. The market reacted negatively, reflecting investor concerns over these declines.

Key Takeaways

• ENCE’s Q1 2025 revenues fell by €17 million year-on-year.
• The company plans to launch a fluff pulp line in Q4 2025.
• Stock price dropped by 4.51% following the earnings announcement.
• Strong liquidity position with €316 million.
• Net debt stands at €331 million with a leverage ratio of 1.8x.

Company Performance

ENCE experienced a challenging first quarter in 2025, marked by a decrease in both revenues and profits. The company’s group revenues fell by €17 million, and profits decreased by €1 million compared to the same period last year. Despite these challenges, InvestingPro analysis shows the company maintains a GOOD financial health score of 2.67, with strong profitability indicators including an EBITDA of €148.44 million over the last twelve months. This performance contrasts with the broader industry trend of rising pulp prices, as ENCE navigates through these financial hurdles.

Financial Highlights

• Revenue: Decreased by €17 million year-on-year.
• Consolidated EBITDA: €34 million, €1 million lower than the previous year.
• Group Profit: €2 million, down by €1 million year-on-year.
• Consolidated Free Cash Flow: €20 million.
• Net Debt: €331 million with a 1.8x leverage ratio.

Outlook & Guidance

Looking ahead, ENCE is focusing on strategic growth initiatives. The company plans to launch its first fluff pulp line in Europe using eucalyptus by Q4 2025. This new product is expected to deliver an additional €60 per ton in margin. Additionally, ENCE aims to launch renewable packaging solutions within the year, indicating a strong commitment to innovation and sustainability. InvestingPro analysis reveals several positive indicators, including a low P/E ratio relative to near-term earnings growth with a PEG ratio of just 0.1, suggesting potential upside for investors. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

• "Industry experts continue to forecast an improving price outlook with estimated average hardwood pulp prices of over $1,400 per ton in 2027." - Ignacio Colmulares, Executive Chairman.
• "We are building a large biofertilizer and biomethane platform in Spain." - Ignacio Colmulares, Executive Chairman.
• "Our higher margin and value added pulp sales are expected to exceed 60% of the total by 2028." - Ignacio Colmulares, Executive Chairman.

Risks and Challenges

• Declining revenues and profits present a financial challenge.
• High net debt levels with a leverage ratio of 1.8x.
• Potential impact of US-China trade tensions on global markets.
• The need to successfully launch and market new products like fluff pulp and renewable packaging solutions.
• Dependence on the European market, which may expose the company to regional economic fluctuations.

Q&A

During the earnings call, analysts inquired about the potential impact of US-China trade tensions and the company’s strategy for fluff pulp production. ENCE executives confirmed a stable outlook for the European pulp market and highlighted their cost reduction strategies, which are expected to enhance profitability in the coming quarters.

Full transcript - ENCE (ENC) Q1 2025:

Conference Moderator: Good morning, ladies and gentlemen. Welcome to the NSA q one twenty twenty five results presentation. I will now hand over to mister Ignacio Colmulares, executive chairman, and Alfredo Alvelio, CFO. Gentlemen, please go ahead.

Ignacio Colmulares, Executive Chairman, NCES: Good morning, ladies and gentlemen. Thank you for joining NCES first quarter twenty twenty five results conference call. Sorry for the small delay, but as you can see, we have a light problem on the presentation. You are going to see some paragraphs in red. We don’t know why.

We’ve been trying to correct that, but we haven’t been able. Our CFO, Alfredo Abejo, and our head of IR and m and a, Ines Alvarez, are also connected to this call. After the presentation, we will be pleased to answer any questions you may have. The tight pulp supply demand balance drove prices higher in the first quarter, as you can see on Slide six. Pulp prices bottomed out in December.

Since then, the European hardwood pulp price has rebounded by 21% to $12.18 dollars for orders placed in March and delivered in April. Demand for market pulp continued to grow in the first quarter driven by China, with a 5% year on year increase to February. The record price differential is softwood pulp is boosting demand for hardwood pulp. Hardwood pulp demand was up 7% year on year to February. On the supply side, pulp producers’ inventories remain relatively low at forty days.

Moreover, the bankruptcy of a large integrated Chinese pulp and paper producer has created a paper supply gap and the major Brazilian mill continues to switch from hardwood to dissolving pulp. I believe that this tight pulp supply demand balance should continue to support strong pulp prices despite the short term turbulence caused by The U. S. Tariff announcements. In the medium term, pulp demand growth is expected to continue at healthy rates, driven by tissue consumption, while no significant market pulp capacity additions are expected in Latin America until 2028, supporting a positive outlook for pulp prices in the coming years.

Industry experts continue to forecast an improving price outlook with average hardwood pulp prices of over $1,400 per ton in 2027. Turning to Slide seven, it is worth noting that virtually all of our sales are generated in Europe, where we have a significant competitive advantages in logistics and customer service, making us more resilient to rising trade tariffs elsewhere. Our pump is mainly used to make basic and resilient consumer products such as tissue paper and hygiene products. Almost all our wood consumption is sourced locally. Our chemicals are also locally sourced or imported from Western Europe.

Our pulp mills are energy self sufficient. They generate, as you know, surplus of renewable energy, which is sold to the national grid at a regulated price. Similarly, % of the biomass used in our renewable business is sold locally, and the energy produced is sold also on the national markets. Continuing with Slide eight, our ongoing FX hedging policy will allow us to mitigate the impact of a weaker dollar. As you can see in this slide, we have secured an average cap of $1.09 for almost 50% of our expected pulp sales in 2025.

Turning to Slide nine, the record price gap with solid pulp is strengthening demand for our Ence Advanced pulp, which accounted for 35% of our total pulp sales in the quarter. These products deliver higher margins than our standard pulp as they substitute solid pulp, which is more expensive. We expect these products to continue to gain market share, reaching 50% of our total pulp sales by 2028, excluding our expected fluff pulp sales. We expect these products to generate an additional margin of almost €30 per ton, improving our average sales price by €15 per ton and our EBITDA by $15,000,000 by 2028. Continuing with Slide 10, our first line to produce up to 125,000 tons of fluff pulp at Navia is on track to start up in the fourth quarter.

Fluff is a special absorbent pulp used mainly in hygiene products such as sanitary towels, nappies, and feminine care products. Today, it is mainly produced in The US. We are the first in Europe to produce it using more economical eucalyptus pulp, replacing the more expensive so good fluff pulp. Our new line has attracted plenty of interest from several potential customers. We are now targeting an accelerated ramp up in 2026.

Flask pulp has traded at an average premium, net of commercial discounts of over $300 per ton over hardwood pulp over the last five years. We expect our flash pulp to deliver a net extra margin of over €60 per ton over our standard pulp. This extra margin should allow us to improve the EBITDA of our pulp business by over $7,000,000 when fully ramped up. Together, our Ence Advanced pulp and our FLASH pulp will account for more than 60% of our total pulp sales by 2028, with an additional margin of $22,000,000 per year. Turning to Slide 11, as previously announced, in February, we sold 191 gigawatt hour of energy saving certificates for EUR 30,000,000 net.

They were cashed in and reported as other operating income in the quarterly results of our pulp business. The sale is a result of our continued efforts to create shareholder value through efficiency improvements at all our plants. We are working on further energy efficiency measures to achieve more certificates during 2025 and beyond, though we don’t expect them to be as substantial as those already achieved. Turning now to Slide 12, I would like to highlight the positive performance of La Galera biomethane plant in its first quarter under our management. We acquired the plant last December and it has already improved its biomethane production by 67% in the first quarter compared to the previous one.

We have started to adapt the plant to our unique business model to transform local agricultural biomass and livestock manure into a biofertilizer with multiple benefits and without disturbing the local communities. Firstly, we are eliminating odors and adapting the biomass transportation routes to avoid the tracks passing to nearby villages. Secondly, we want to upgrade the plant’s waste, the digestate, into a high quality organic fertilizer. We aim to produce and sell 20,000 tons of our biofertilizer in this plant as from 2027. Finally, we are boosting the plant biomethane production up to the targeted 50 gigawatt per year by improving the process and eliminating production bottlenecks.

These improvements will allow us to increase the plant’s annual EBITDA from over $1,000,000 expected in 2025 to over $4,000,000 expected in 2027. The acquisition of this plant is an important milestone that enables us to fast track the development of a large biofertilizer and biomethane platform in Spain, and to showcase the value added by our respectful business model. This is a planned model that we will be showing this year to the communities where we are developing our other projects. As you can see on the following slide, number 13, we have a portfolio of 32 biofertilizer and biomethane projects in Spain, which already have land and feasibility studies completed. 16 of these projects are already well advanced in the permitting phase.

We expect 10 of them to be ready to build during 2025 and 2026. On top of this, we are working on other 16 projects, which are at an earlier stage of development. We plan to build these plans with EPC contracts using non request project financing backed by long term PPAs, as we did in La Garela. Our initial goal is to generate over one terawatt hour per year and to contribute over $60,000,000 to EBITDA by 02/1930. However, if we consider all the projects that we are developing, we could reach over three terawatt hour per year.

Let’s continue with the progress of our biomass thermal energy business on Slide 14. There is an opportunity to generate more competitive renewable thermal energy with biomass to help decarbonize the Spanish industry at an attractive return. Through our subsidiary Magnum, Servicas and Hetikos, we signed our first O and M contract in 2023 with a major industrial company in the food and beverage sector in Spain. At the end of twenty twenty four, we signed a second contract with a leading company in the brewing sector in Spain for the installation of two boilers at one of their facilities and for the supply of 85 gigawatt hour of biomass thermal energy per year with a fifteen year term. We have already started work to launch the service in the first half of twenty twenty six with an expected contribution to EBITDA of over $2,000,000 annually.

This project is our second step in the creation of a renewable industrial heating platform in Spain, as you can see the following slide number 15. We are now working on another 13 projects with important industrial companies in the food, beverage and chemical industries in Spain to provide them with renewable thermal energy. We are in exclusive negotiations for three of these projects, which are expected to materialize this year. As in the biomethane business, we plan to build these biomass thermal plants using EPC contracts and non recourse project financing backed by long term PPAs. The aim of Magnum Services Energeticos is to produce two terawatt hour per year of renewable thermal energy by 2,030 and to contribute over $40,000,000 to EBITDA.

I now invite Alfredo to elaborate further on our first quarter financial results. Thank you, Ignacio. Let’s continue with the financial performance of our pulp business in Slide 17. Our pulp business EBITDA attained EUR 28,000,000, supported by the 35% sales rate of MCAD Advanced Products with higher margin sold in the quarter, the €11 per ton cash cost reduction compared to the previous quarter as the temporary factors, which affected our cash cost in the fourth quarter of last year began to dissipate as guided in our previous call. The sale of energy savings certificates for net amount of €30,000,000 coming from our continuous effort in improving energy efficiency in our operations and the gross pulp price increase from the loss of $1,000 per ton to the current $1,218 per ton now in April.

This $28,000,000 EBITDA figure is in line with the same period of 2024 despite the lower production and sales as a consequence of the different calendars for the year end maintenance shutdown at Navia, which was planned for March, while in 2024 took place in the month of April. The absence of the cogeneration turbine at Navios had one off cost impact of EUR 8,000,000 in the quarter and repairing plans to restart its operating operation continued for mid May. We also keep on expecting annual pulp sales above 1,000,000 tons for 2025. Turning now to Slide 18, let’s talk about our renewables energy platform. As you know, our renewables energy platform is being developed over four main business verticals all linked to our main base core activity and a strong operating know how.

The collection and management of different kinds of biomass and its transformation into non conventional renewable energies. These four main verticals are firstly, our traditional business of biomass into regulated energy currently operating 266 megawatts. Secondly, our energy services business aiming to decarbonize the Spanish food and beverage and chemical industry through providing efficient nonfossil thermal energy, currently managing energy service to one for one of the biggest Spanish breweries under the construction process of a second one and in the final negotiation phase of another three contracts. Thirdly, the production of biofertilizers and biomethane from agroforestry and livestock biomass, currently operating 50 megawatt plant recently acquired in December. And fourthly, we are taking first steps for the capture and valorization of the biogenic CO2 produced in our plants towards our potential contribution into the e fuels industry.

All these four verticals also enjoy from very same and critical pipelines. Now focusing in our traditional biomass into regulated energy business, this EBITDA was 6% higher than that in the same period of last year, attaining EUR 7,300,000.0 compared to EUR 6,900,000.0. When comparing to the previous quarter, the EUR 1,700,000.0 difference is mainly explained through the planned annual maintenance stoppages carried out for 70% of our installing capacity during the first quarter in the expectancy of our cost in the coming quarters. This planned annual maintenance resulted in 12% lower energy volume sold compared to the previous quarter. However, this volume is still 19% higher than in the first quarter of last year.

Remember that our new methodology for updating quarterly remuneration of biomass plants was published back in June 24 with retroactive effects as of first January twenty four. The average sales price recognized for our biomass plants in 2025 is approximately €117 per megawatt hour and has two main components. Our regulatory pool price, which is estimated by the regulator using a basket of forward prices, and RO for the difference up to the set €117 per megawatt price. And on top of these two components, we still receive the remaining RI, which for the quarter was EUR 6,400,000.0. It may happen that the real market pool price in each quarter may differ from that estimated by the regulator to the basket of forward prices.

Under the old methodology, this difference was compensated through the regulatory collar, but this collar has now been eliminated. In order to mitigate such risk, we have established a hedging policy that replicates the formula used by the regulator to estimate the regulatory pulp price, currently covering up to 40% of our estimated energy sales for the quarter and ending in a net positive impact of $2,700,000 in the first quarter, including 1,500,000.0 settlement from these hedges. Net operating costs were flat in the year year on year at €16 per megawatt higher than in the previous quarter due to higher fixed cost derived from the set plant maintenance shutdowns carried out in the quarter. We continue to expect higher energy generation and lower operating costs in 2025 as a result of higher fixed cost dilution and lower biomass costs. When analyzing the full renewable business, including all four verticals, consolidated EBITDA was EUR 6,000,000 for the quarter.

This is some 10% lower than in the first quarter of last year, which included EUR 700,000.0 positive contribution from the sale of a 10 megawatts PV project. The other three renewable businesses verticals had an impact of EUR 1,000,000 of EBITDA in the first quarter due to its earlier stage of development and lower fixed cost dilution. Let’s continue on Slide 19 with our quarterly consolidated results. Although group revenues were lower by EUR 17,000,000 year on year, our consolidated EBITDA was just €1,000,000 lower at a solid €34,000,000 This is €22,000,000 higher than in the previous quarter due to the sale of energy saving certificates coming from our energy efficient efficiency projects in the power business. Finally, the group profit reached €2,000,000 in the quarter, 1,000,000 less than in the first quarter of last year and €12,000,000 more than in the previous quarter in 2024.

Turning now to Slide 20. Consolidated free cash flow before working capital variation and growth CapEx reached EUR 20,000,000 in the quarter. Working capital implied a cash outflow of 8,000,000, mainly driven by an increase in wood inventories related to Navios plant maintenance shutdown in March. Growth and sustainability CapEx amounted to EUR 11,000,000 in the quarter, 8,000,000 coming from the pulp business, mostly related to our first fluff pulp line or first recycled molded fiber packaging line after the carbonation decarbonization and cost cutting project in Navia. Regarding our renewable business platform, we invested €4,000,000 concentrated in our recently acquired conventional biomethane plant in La Galera to improve its performance and round out its process for the future production of biofertilizers.

Also, we continue with development of our biofertilizer and renewable industrial heating verticals in Spain. Continuing with Slide 21, our consolidated net debt level was EUR $331,000,000 at the end of the quarter, including EUR 61,000,000 under IFRS 16. This is EUR 10,000,000 higher than at the end of twenty twenty four. EUR ’5 million is explained by the free cash flow, another EUR 5,000,000 by leases increase under the IFRS 16 in the pulp business and the provision of interest in the renewable business. This figure implies a low leverage ratio of just 1.8 times the group average cycle EBITDA.

We ended the quarter with a strong liquidity position amounting to a consolidated EUR $316,000,000 with long term debt maturities in both businesses and no covenants in the pulp business. Note that this liquidity position does not include the revolving credit facilities amounted to €130,000,000 in the pulp business and €20,000,000 in the renewable business and which remain fully available. Also, a non recourse green project financing facility for the acquisition and planned investments at La Galera plant was closed in January for a total principal amount of $20,000,000 and a final maturity in June 2037. Let’s turn now to Slide 22. I would like to conclude my section emphasizing once again, Enphase continued an exceptional sustainability performance.

We are leaders in sustainable forestry, circular economy, social commitment, gender gender equality, and corporate governance. Our best practices have been recognized by independent ESG agencies and industries. They have been ranked by System Analytics as the most sustainable player in the global pulp industry for four consecutive years. They have also been awarded the EcoBodies Platinum Medal, the highest rating awarded by this platform. And we remain members of the PreferStage Use Food Shield for Good Index since 2021 and the IBEX ESG and IBEX Gender Equality Indexes.

Let me hand back now the floor to our Executive Chairman, Ignacio Connoy. Thank you, Alfredo. Let me conclude with our outlook for 2025 and some closing remarks. Regarding the outlook for 2025 on Slide 24, I would like to highlight the following. Pulp prices bottomed out in December.

Since then, the European pulp price has rebounded by 21% to $12.18 dollars per ton in April. Virtually, all of our sales and all of our sourcing of raw materials are done in Europe, making us more resilient to rising trade tariffs as well. Our ongoing FX hedging policy will allow us to mitigate the impact of a weaker dollar. We expect the cash cost reduction to continue during 2025. Our first fluff pulp line is on track for startup in the fourth quarter.

We will start the production and sale of our renewable packaging solutions later this year. Let me finish now with some closing remarks on Slide 25 before we move to the Q and A session. Industry experts continue to forecast an improving price outlook with estimated average hardwood pulp prices of over $1,400 per ton in 2027. Our higher margin and value added pulp sales are expected to exceed 60% of the total by 2028, including both our Ence Advanced Pulp and Flask Pulp sales, delivering over $22,000,000 of additional margin. We are building a large biofertilizer and biomethane platform in Spain, which aims to produce over one terawatt hour by 02/1930 and contribute over $60,000,000 to EBITDA.

Our Thermal Energy business is developing well. It aims to produce two terawatt hour by 02/1930 and contribute over $40,000,000 to EBITDA. Reaching these goals should allow us to more than double the renewable business EBITDA over the next five years, whilst the transformation of Ence into a producer of special pulp will significantly improve the business operating margin. Remember that the execution of these projects will be adapted and aligned to our cash flow generation to maintain a prudent leverage and an attractive remuneration for shareholders. Thank you for your attention.

We will be pleased now to hear any questions you may have.

Conference Moderator: Thank you. And ladies and gentlemen, the Q and A session starts now. You will have the opportunity to ask all the questions that you may have. We kindly ask you to ask only one question at a time to our speakers instead of asking multiple questions at the beginning. And once again, please press star one to register for a question.

And your first question comes from the line of Cole Hathorn with Jefferies. Please go ahead.

Cole Hathorn, Analyst, Jefferies: Good morning. Thanks for taking the question. Can I just start off with your views on pulp near term? I mean, you’ve been quite clear medium term around supportive supply and demand until 2028. But on the short term, we’ve got a lot of trade uncertainty, and we’ve seen cuts to import prices in China as well as the resale price levels come down a fair amount.

I’m just wondering how you see Europe versus China price gap developing over the next three to six months. Do you think that the European index prices or net prices might be able to maintain a premium versus, China net prices? Thank you.

Ignacio Colmulares, Executive Chairman, NCES: Yes. Thank you very much, Claudia. I do think that, the European market will keep a premium over the international market. The situation in China is very different to the situation in Europe today. It is true that, the impact of the mathematical impact of the tariffs in the pulp demand in China is minor because the the volume imported from China to The States in paper is below 1,000,000 tons, 400,000 tons of tissue paper, and, 500,000 tons on packaging.

Then well, if China lose this market of 1,000,000 tons, it is not a big volume compared to the total size of the industry of the paper and pulp industry in in China, where just just the market pulp is over 30,000,000 tons. But in the other hand, US exports paper as well to China. US exports almost a million tons also of packaging products to China. Then, well, we we see that China will try to export those products to other countries. China may lose a small part of this volume.

And on the other hand, in pulp, as you know, China is not exporting to The US nor to the rest of the countries. And the the states are exporting pulp to China. They are exporting 1,000,000 tons of flask per year to China. And, well, I think that’s an opportunity for the producers of pulp in Scandinavia, in Brazil, and if the tariffs the tariffs keep on to NSAID at the end of the year. Then we see today, there is a a lot of uncertainty in China.

But if you take data and mathematics, the impact in the pulp and paper industry in China is very limited. And as we were saying before, well, more than 70% of what we produce goes to hygiene products, and more than 70% of the pulp China is importing goes to tissue paper and hygiene products. Basic products were not affected by these kind of things. Then we think that we are now trying to fix the prices for May in Europe. It is tougher than it was four weeks ago or eight weeks ago.

That’s true. We still don’t have the results. We will continue pushing for trying to keep prices going up, but we will see the results during next week, not before. It is tougher than, one month ago. I think personally that, maybe now we are going to be, during several weeks on a on a platform stable at stable prices at the level we have already reached.

And the most probably, after all these uncertainty starts to to stop, the part will continue going up. That’s my vision.

Cole Hathorn, Analyst, Jefferies: And then maybe just a follow-up on on that, view on the European stability index prices from here. Have you seen any changes in customer order patterns for uncertainty or anything changing from the customer basis or any inventory accumulation? I’m just trying to assess if there’s any change in order patterns or inventories that you’re seeing on the pulp side.

Ignacio Colmulares, Executive Chairman, NCES: No. We haven’t seen any increase of inventories. We have seen on the last two weeks some spot offers at, let’s call that international prices, but they are very limited. They make a lot of noise, but they are quite limited in terms of volume.

Cole Hathorn, Analyst, Jefferies: And then you brought up fluff pulp from The U. S. Producers selling into China. Now if there are tariffs that might displace a lot of those volumes, how do you think that might impact your ramp up at the Navia mill? Do you see some of those U.

S. Producers potentially exporting more volumes to Europe? Or, do you think this might give you an opportunity if some of the Scandinavians export from Europe into, China while you are trying to ramp up and you can place more volumes in Europe? Wanting to know if you have any thoughts there or was it too early?

Ignacio Colmulares, Executive Chairman, NCES: What I have seen is, and my vision is what I said before. There is now a big opportunity for Brazilians and Scandinavians to substitute The US exports of fluff to China. And but I think that will be good for the European market in terms of a limited offer. I I don’t see, I I don’t see The US increasing the exports to Europe, because they have they have, it’s it’s long term contracts, and, and the, the European customers are not going to to buy more. They are already buying and they are satisfied with what they are getting from, the mix they are getting from, from Scandinavia and from Brazil and on on The States.

And what we see is, because of all those doubts, all these doubts regarding the tariffs, we see an increasing interest of all the European customers, in ENSE starting as soon as possible to produce pulp. We are going to have by May 15, we are going to be able to produce flash pulp, but on base, not on goals, on base. We will, with that, start the the homologations. And, we think that we are sure that by the fourth quarter, we will have, coils available, and then we will start all the process of homologation. And today, we see that we are going to have a more accelerated ramp up of this business than what we expected two years ago when we launched the new opportunity.

Cole Hathorn, Analyst, Jefferies: Thank you. And then finally, just love your thoughts on how cash costs in pulp developed through 2025 and all the temporary issues now resolved and behind you?

Ignacio Colmulares, Executive Chairman, NCES: Yes. Well, we it’s it’s pretty better today. Yeah. April, has been a different month of, of the first quarter. Some problems, we have on the energy generation on the pulse mix is solved.

We I can confirm that on May 15, the alternator alternator in the Navya is going to start to work. We had, as you remember, on the last quarter twenty twenty four and first quarter twenty twenty five, huge increases of chemicals prices because some problems, you know, on a large mill in Spain producing chemicals. That’s also solved. The chemicals price is down now. And that’s why we see a cash cost for this quarter, for April ’85.

And our guidance for the cash cost of the full year is also $4.85.

Cole Hathorn, Analyst, Jefferies: Thank you.

Ignacio Colmulares, Executive Chairman, NCES: Thank you.

Conference Moderator: Question, seem to press star one on your telephone keypad.

Ignacio Colmulares, Executive Chairman, NCES: Okay, gentlemen. Thank you very much for your time. I hope to be in contact with you in three months time. Thank you. Thank you.

Conference Moderator: Thank you. And ladies and gentlemen, this now concludes our presentation. Thank you all for attending. You may now disconnect.

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