Earnings Call Transcript - DK Q3 2023

Operator, Operator

Good day, and welcome to the Delek US Third Quarter earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note this event is being recorded. I would now like to turn the conference over to Rosy Zuklic, Vice President of Investor Relations. Please go ahead.

Rosy Zuklic, Vice President of Investor Relations

Good morning and welcome to the Delek US third quarter earnings conference call. Participants on today's call will include Avigal Soreq, President and CEO; Joseph Israel, EVP, Operations; Reuven Spiegel, EVP and Chief Financial Officer; Mark Hobbs, EVP, Corporate Development. Today's presentation material can be found on the Investor Relations section of the Delek US website. Slide two contains our safe harbor statement, regarding forward-looking statements. We'll be making forward-looking statements during today's call. These statements carry risks and uncertainties that may cause actual results to differ materially from today's comments. Factors that could cause actual results to differ are included here as well as in our SEC filings. The company assumes no obligation to update any forward-looking statements. I will now turn the call over to Avigal for opening remarks.

Avigal Soreq, President and CEO

Thank you, Rosy. Good morning and thank you for joining us today. We delivered strong third quarter results. All segments performed well. Our team remains focused and drove improvements across our businesses. I thank each member of our Delek team for their contribution. From a macro perspective, during the quarter, we saw significant volatility in the markets. Gasoline crack weakened, while diesel crack remained strong, driven by inventory levels continuing at five-year lows. Given our higher distillate production relative to our peers, we are at a competitive advantage. The refining segment ran well, achieving record total throughput during the quarter. Joseph will provide more details on our refinery operations in his remarks. In logistics, we are investing in continued growth of our business. We benefited from our favorable permit location, which led to another record quarter. Given our strong portfolio performance, we are confident in DKL's ability to exceed $100 million in quarterly EBITDA run rate by the fourth quarter of this year. Reflecting on my first year as CEO of Delek, we have much to be proud of. When I returned to Delek, I outlined my focus areas: safe and reliable operations, being shareholder-friendly, having a strong balance sheet, unlocking the sum of the parts value, and improving our cost structure efficiency. We are very focused on these objectives, and our dedication to complete each one has not wavered. We have made progress in all of them. On the operations side, we enhanced our team with experienced talent. Together, we streamlined the structure and process toward our operations, which has led to strong safety results. We achieved a total record throughput in our refining system. Earlier in the year, we successfully completed the Tyler turnaround with recordables on time and on budget. Post turnaround, the refinery is performing at higher yield and, most importantly, record capture rates. Over the past year, our logistics business achieved record EBITDA quarters. In Q3, retail achieved its highest EBITDA since COVID. We continue to be shareholder-friendly; on October 2, we repurchased $85 million of shares and included the latest increase raised the dividend five times in a row. We improved our financial position by using our strong cash flow to reduce our net debt by $476 million during the year. Our $100 million cost reduction efforts are well underway, and we are seeing early results. We have a clear strategy for unlocking value from the sum of the parts and we are well on our way to meet our objectives. This consistency resulted in tangible progress. Importantly, the achievements I just outlined position us well for the mid-cycle market environment, both from an operational and financial standpoint. In closing, we are pleased with our strong quarter and will continue to drive further improvements and unlock value from our business. Now I would like to turn the call over to Joseph, who will provide additional detail on our operations.

Joseph Israel, EVP, Operations

Thank you, Avigal. Moving to slide 5. In the third quarter, our team processed a record high of 306,000 barrels per day of total throughput. Our focus on people, process, and equipment helped us build a solid organization to support safe and reliable operations. The combination of favorable market conditions and strong operational performance led to a $286 million adjusted EBITDA contribution by the refining segment. In Tyler, total throughput in the third quarter was approximately 76,000 barrels per day, with a production margin of $23.66 per barrel reflecting improved reliability, yield recovery, and a strong capture rate of 73%. Operating expenses were $4.74 per barrel, including elevated utility costs of approximately $0.50 per barrel due to high electricity demand in Texas late in the summer. For the fourth quarter, estimated total throughput in Tyler is in the 73,000 to 76,000 barrels per day range. In El Dorado, total throughput was approximately 84,000 barrels per day with a production margin of $12.57 per barrel. Operating expenses were $4.36 per barrel. Estimated throughput for the fourth quarter is in the 81,000 to 84,000 barrels per day range. In Big Spring, total throughput for the quarter was approximately 65,000 barrels per day, driven by maintenance work but still within our guidance range. The production margin was $15.92 per barrel, including an estimated unfavorable $3.50 per barrel impact from maintenance activities. Operating expenses in Big Spring were $1.37 per barrel, including approximately $0.80 per barrel of unplanned activities and an additional $0.70 per barrel related to elevated utility costs. In October, we completed a planned outage to replace a reformer catalyst and a couple of reactors. Consequently, the estimated fourth-quarter throughput in Big Spring is in the 61,000 to 64,000 barrels per day range. We are excited about the progress at Big Spring. Our leadership team is committed to pushing operational excellence to the next level. In the third quarter, we improved throughput, capture, and OpEx compared to the second quarter, and we plan for the following improvements at the controllable level: throughput up approximately 5,000 barrels per day from our year-to-date 66,500 barrels per day performance level, and capture up 15% to 20% from our year-to-date 52.6% level. We expect to realize 65% of the improvement in 2024 and the remaining 35% in 2025. In Krotz Springs, total throughput was approximately 81,000 barrels per day, with a production margin of $12.45 per barrel and operating expenses of $5 per barrel. Planned throughput in the fourth quarter is in the 77,000 to 81,000 barrels per day range. In the third quarter, wholesale and asphalt marketing added about $35 million for the refining segment earnings compared to $80 million in the second quarter. This result is outside of our reported margins at each of the refineries and their associated capture rates. Wholesale marketing contributed about $20 million, down from approximately $60 million in the second quarter, and asphalt marketing contributed approximately $15 million compared to about $20 million in the second quarter. The results of both businesses were impacted by rising oil prices but importantly allowed us to manage inventory even with record-high throughput of our refining system. The resilient demand in our niche markets and access to rack blending are significant strengths of our integrated downstream business model. Concerning the fourth quarter, our refining system planned throughput is in the 292,000 to 305,000 barrels per day range. We are well positioned to capture strong distillate margin environments with our 42% distillate yield capability. No major turnaround is planned until the fourth quarter of 2024 in Krotz Springs. In PKL, the team delivered another record quarter under operational excellence focus and growth. I will now turn the call over to Rosy for the financial variance.

Rosy Zuklic, Vice President of Investor Relations

Thanks, Joseph. Starting on Slide 6. For the third quarter of 2023, Delek US had a net income of $129 million or $1.97 per share. Adjusted net income was $132 million or $2.02 per share and adjusted EBITDA was $345 million. Cash flow from operations was $433 million. On Slide 7, we provide a waterfall of our adjusted EBITDA by segment, from the second quarter to the third quarter of 2023. The increase was primarily from improved results in refining, driven by higher throughput in Krotz during the third quarter. Logistics had a record quarter at nearly $97 million, and Retail had another strong quarter with EBITDA of $16 million. Corporate segment costs increased compared with last quarter, largely due to bonus accruals. Moving to Slide 8 to discuss cash flow, we built $80 million in cash during the quarter, ending the third quarter with a balance of $902 million. The $433 million in cash flow from operations reflects the strong performance of the quarter. Included in this amount is $177 million in favorable working capital, largely from improved inventory management. Investing activities of $59 million were mainly for capital expenditures. Financing activities of $294 million primarily reflect paydown of debt and return to shareholders, including $176 million of debt repayment, $25 million in buybacks, $15 million in dividends and $10 million in distribution payments. On Slide 9, we show capital expenditures. Year-to-date, total company expenditures are $302 million. We estimate the full-year CapEx to be in the range of $380 million to $390 million before any reimbursement. We expect to receive approximately $20 million of insurance proceeds, with growth CapEx partially funded by producers as well as other reimbursements. Including this, net capital expenditures for the year, are in the range of $360 million to $370 million. Net debt is broken out between Delek and Delek Logistics on Slide 10. During the quarter, we built $80 million of cash and paid down $176 million of debt, ending the quarter with a net cash position. Slide 11 covers outlook items for the fourth quarter of 2023. In addition to the throughput guidance Joseph provided, we expect operating expenses to be between $210 million and $220 million, G&A to be between $65 million and $70 million, D&A to be between $90 million and $95 million, and net interest expense to be between $80 million and $85 million. We will now open the line for questions.

Operator, Operator

Thank you. We will now begin the question-and-answer session. Our first question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta, Analyst

Hey guys. First of all, congrats big improvement from both Tyler and El Dorado. So help us understand what were the factors helping you out over there? And then as it relates to Big Spring was it just a turnaround, and we shouldn't be worried that when you actually start running hard in 4Q, some of the issues you saw would be behind you, so if you could talk about those things?

Avigal Soreq, President and CEO

Hey, Manav. It's Avigal. Thank you for the question. Yes, you're right. We see a big improvement in both places, and that we can address a few areas. At Tyler, a lot of work has been done over the turnaround, and we see the fruits of it, both on the product mix and the yield. We are fortunate with the Tyler market. It's growing and our ability to deploy a product is strong. In El Dorado, it’s a great asset with capabilities such as the hydrogen plant, reformer, and other strengths that we are just starting to leverage. We are very optimistic about that as well. Joseph can finish the answer.

Joseph Israel, EVP, Operations

Yes. Thank you. We are very excited about our progress. In Tyler, our 45% distillate yield is a significant advantage, especially as we move from the third quarter into this quarter. The lower oil prices and better margin environment have also supported our capture in both Tyler and El Dorado. We are very happy with the progress in Big Spring. We have the right management team in place and feel confident as we implement best practices. We are not worried about the turnaround being two years out. We believe in the mechanical integrity and our ability to operate at a higher level.

Manav Gupta, Analyst

Perfect. My quick follow-up here is, as it relates to supply, marketing and other, which was formally your trading and supply. A big swing quarter-over-quarter. I know behind the scenes, Rosy has been working very hard in trying to expand the street. What are the metrics that drive that performance? But if you could help us understand some of the reasons there was such a big swing in this segment quarter-over-quarter.

Avigal Soreq, President and CEO

Yes. Thanks, Manav. In that line, there would be a bit more volatility than other lines. Joseph, you have a lot of passion around it; why don't you give a wider view?

Joseph Israel, EVP, Operations

Okay. We provided information about the asphalt and wholesale marketing results. Asphalt made $15 million, and wholesale marketing made $20 million. Both were lower than the previous quarter due to increased oil prices. The lag in pricing serves as a headwind for these types of businesses. The inventory management and derivatives are really aimed to mitigate risk.

Manav Gupta, Analyst

Thanks guys. Congrats on a good quarter and good to see a pay down of debt. Thank you.

Avigal Soreq, President and CEO

We appreciate it, Manav. Have a good evening.

Operator, Operator

Our next question comes from Neil Mehta with Goldman Sachs. Please go ahead.

Neil Mehta, Analyst

Yeah, thank you. I hope everybody's family is doing okay back home, Avigal in particular.

Avigal Soreq, President and CEO

Thank you for the warm welcome. I appreciate it.

Neil Mehta, Analyst

Awesome. Hey, Soreq, again, a very good quarter there at Tyler. We'd love your perspective on the markets right now. We see this significant dislocation in cracks between gasoline and distillate and how does this play out as we move into 2024? How much of the weakness in gasoline is just seasonal? As we're trading winter grade versus something more structural, and do you see the distillate side normalizing, given the weakness in gasoline through yield switching? Please talk us through the product markets and how they evolved as we set up into 2024.

Avigal Soreq, President and CEO

I would love to do that. Obviously, ULSD is in a five-year low in terms of inventories that determine the majority of the crack. On the distillate side, we don't really know what the winter in Europe will bring, but a colder winter would be another upside. On the gasoline side, we have seen, as mentioned in the prepared remarks, some weakness, but most of it is seasonal. We believe that the demand for gasoline is solid. Our markets are resilient for demand. Our ability to deploy products effectively, while other companies faced challenges, is a testimony to our market resilience. Overall, we think it's the right place to be.

Neil Mehta, Analyst

Thanks guys. The follow-up is just on how we're thinking about unlocking some of the parts' value. You, Avigal, spent a lot of time talking about this as you stepped in; how do you transfer some of the value that fits DKL and accrue to DK at the parent level? Please elaborate on the different strategies that you're considering and what stage you are at in unlocking that value.

Avigal Soreq, President and CEO

Neil, I have said many times that we are committed to make this happen for our shareholders. Our focus remains on achieving this objective. While we work very hard, we have initiated a cost reduction program, which presents an excellent opportunity for the mid-cycle environment. Our commitment is unwavering regarding unlocking value across the company, and we'll continue to engage seriously in these discussions.

Mark Hobbs, EVP, Corporate Development

Yes, thank you, Avigal, and thanks, Neil, for the question. As mentioned on prior calls, we've been evaluating numerous options and alternatives available to us. We have strong conviction around the actions we intend to take regarding the sum of the parts. We are focused on preserving our ability to perform well and maintaining significant liquidity to exploit accretive growth opportunities in the future. We are committed to extracting value across our businesses where we see opportunities to do so.

Neil Mehta, Analyst

Thanks, Mark.

Operator, Operator

Our next question comes from Ryan Todd with Piper Sandler. Please go ahead.

Ryan Todd, Analyst

Thanks. Maybe a question on CapEx for you as we look into 2024. I know that you said that from a maintenance perspective, you don't have another major turnaround until the fourth quarter of next year. Can you maybe talk about how you think about some of the moving pieces on capital as we look into 2024 and how we should evaluate a run rate there in the next year?

Avigal Soreq, President and CEO

Yes, Ryan, thanks for the question. We are very disciplined with capital deployment. We've demonstrated this repeatedly, both to our shareholders and in debt management. Regarding 2024, specific to your question, while I don't want to rush ahead, we are targeting a lower number than 2023 for capital expenditures.

Ryan Todd, Analyst

Okay, perfect. Thanks. And then maybe just a follow-up on your comments about being in a zero net debt balance sheet position at Delek. How should we think about your priorities here? You've been paying down debt while also buying back shares. Should we expect further work on the balance sheet or a shift towards increased shareholder returns while maintaining this balance?

Avigal Soreq, President and CEO

Absolutely, Ryan. I will provide an overview of our capital allocation strategy. We've increased our dividend five times in a row, and our intent is to continue maintaining this dividend through the cycle. Our approach is balanced between shareholder returns and funding the business. When opportunities to return value to investors present themselves, we are proactive and aggressive in pursuing them while maintaining our focus on execution across the sum of the parts.

Operator, Operator

Our next question comes from Doug Leggate with Bank of America. Please go ahead.

Doug Leggate, Analyst

Hi guys, thanks for having me on. I’d like to hit a housekeeping point first, if I may, which is I think Rosy mentioned the working capital move in the quarter, assisted by improved inventory management. Will that reverse, or are we looking at a permanent reset in working capital?

Avigal Soreq, President and CEO

Hey, Doug. Good morning. I’ll let Reuven talk about working capital.

Reuven Spiegel, EVP and Chief Financial Officer

Hi, Doug. The short answer is it will not revert itself. We have been working on a zero-based budgeting initiative that encompasses a few components, including cost reduction and improved inventory management processes. We tested this process change, and upon successful testing, we executed the new process this quarter, allowing us to reduce inventory by roughly 2.5 million barrels. While there may be fluctuations going forward, we will not revert to old inventory levels.

Doug Leggate, Analyst

So we can treat that additional cash flow as permanent?

Reuven Spiegel, EVP and Chief Financial Officer

Most of it, yes.

Doug Leggate, Analyst

Okay, thank you. My follow-up is really on the reliability improvements. One of the key metrics we consider is what the free cash flow capacity of the portfolio looks like at mid-cycle. Could you provide some guideposts on both operating costs and sustaining capital costs to achieve higher reliability?

Avigal Soreq, President and CEO

Doug, I’ll start and then Reuven or Joseph can chime in. Regarding operating expenses, when margins were at an all-time high, we initiated a cost reduction program to ensure a long runway for improvements. This approach has improved our cost base, both operating expenses and G&A over time. We are better prepared for the potential mid-cycle that might present itself.

Joseph Israel, EVP, Operations

I will only add that in the previous earnings call, we discussed an additional $1 per barrel of OpEx in Big Spring just for the second half of this year, including Q4 to address integrity and reliability opportunities.

Avigal Soreq, President and CEO

That gives you a broader overview on the P&L initiative we started ahead of time. We prepared ourselves and did not wait for the clock to turn.

Doug Leggate, Analyst

Great stuff. Thanks so much, and Joseph I'm looking forward to seeing you next week.

Joseph Israel, EVP, Operations

Great. Good to see you.

Operator, Operator

Our next question comes from Matthew Blair with Tudor, Pickering, Holt. Please go ahead.

Matthew Blair, Analyst

Hey, good morning. Joseph, you outlined expected improvements in Big Spring's refining margin capture. Could you discuss what's driving that? Does it involve any commercial efforts to increase your exposure to Arizona, or is this more focused on refining side in terms of reliability and yield improvement?

Joseph Israel, EVP, Operations

Matthew, it's really fundamentals. We're not introducing innovations; it’s about having the right leadership and implementing best practices to improve reliability. Improvements will enhance capture and OpEx. Our focus will evolve towards commercial and logistics opportunities in the future.

Matthew Blair, Analyst

Sounds good. Thank you.

Reuven Spiegel, EVP and Chief Financial Officer

Thank you.

Operator, Operator

Our next question comes from Paul Cheng with Scotiabank. Please go ahead.

Paul Cheng, Analyst

Hey guys, good morning.

Joseph Israel, EVP, Operations

Good morning.

Paul Cheng, Analyst

First, I want to extend my best wishes to you all and your families in Israel. I hope everyone is okay.

Joseph Israel, EVP, Operations

Thank you, Paul. I appreciate it.

Paul Cheng, Analyst

I have a question for Reuven. In the third quarter, did you experience a meaningful impact from the benefit of mark-to-market on the RVO due to the much lower wind prices?

Reuven Spiegel, EVP and Chief Financial Officer

No.

Paul Cheng, Analyst

Maybe for Joseph, in the fourth quarter, we have opposing forces on the gasoline market: the butane branding and the mine asset branding economy are outstanding, but the gasoline crack is weak. Could you provide insights on how your gasoline yields for the fourth quarter are looking compared to the third quarter?

Reuven Spiegel, EVP and Chief Financial Officer

You're correct. The butane is favorable, but the crack is weak. Also, the RVO is a tailwind against the headwinds we face. Big picture, gasoline crack spreads are low versus last year, though not exceptionally low compared to the previous quarter. We remain optimistic about our future.

Joseph Israel, EVP, Operations

Other than Krotz Springs, which produces light products to the Colonial pipeline, the rest of our system is rack sales based; this provides us the access to blending and allows us to compete well against our peers. We will evaluate the opportunities in the fourth quarter.

Paul Cheng, Analyst

Joseph, do you expect fourth quarter gasoline yield to be higher than the third quarter?

Joseph Israel, EVP, Operations

I don't think so. We are in a distillate mode and will likely maintain close to the 42% yield. That won't be enough unless there's a significant change in gasoline and distillate economics later in the quarter, which I believe is unlikely.

Paul Cheng, Analyst

Okay. A final question from me: once you address the challenges in Big Spring, what is the expected longer-term normal refinery run rate for your system and what is the guidance for cash operating cost under, say, $4 Henry Hub? What's sustaining CapEx looking like?

Joseph Israel, EVP, Operations

Regarding Big Spring, we are looking to return to previous throughput levels in the low 70s, which reflects industry utilization rates.

Avigal Soreq, President and CEO

Our OpEx was $5.48 per barrel for the system with factors still affecting Big Spring. The additional costs we discussed average $1 due to unplanned maintenance and utility increases. We see overall OpEx for the system staying under $5 per barrel even with longer-term energy pricing.

Paul Cheng, Analyst

How about sustaining CapEx?

Avigal Soreq, President and CEO

It's complex due to turnaround cycles, so it's challenging to provide a number without context. We are very disciplined with capital deployment and will only commit when we have full clarity.

Paul Cheng, Analyst

Okay. I understand. Thank you.

Avigal Soreq, President and CEO

Thank you.

Operator, Operator

Our next question comes from Roger Read with Wells Fargo. Please go ahead.

Roger Read, Analyst

Yes, thanks. Good morning. Apologies for joining a little late. If I'm asking about something that's already been discussed, please let me know. I'd like to delve into Big Spring compared to Tyler's performance this quarter. Joseph, you were brought in to enhance operations. Can you share insights on takeaways from Tyler after the turnaround that could be leveraged in Big Spring over the coming months and quarters leading to the next scheduled turnaround?

Avigal Soreq, President and CEO

Roger, with your permission, I will start, and then Joseph will add comments. Tyler demonstrates how operations improve after a turnaround, including MTBF, capture, and other efficiencies. Joseph has a great energy at Big Spring; feel free to add.

Joseph Israel, EVP, Operations

The turnaround scope at Tyler was excellent, and the improvements made, including better quality inputs to the FCC and catalyst replacement, yielded results we are excited about. The key for Big Spring is focusing on the fundamentals, culture, and processes. These aren't costly investments; they yield tangible improvements.

Roger Read, Analyst

Okay. A follow-up regarding Krotz Springs. Historically speaking, its product yield has been less favorable for clean diesel. Are there any observed changes in how that product is being allocated to the market?

Avigal Soreq, President and CEO

In general, Krotz Springs is integrated into the Colonial pipeline system, and we're seeing improvements from our hard work and commitment to safety, reliability, and yield. We are pleased with KSR's performance and expect improvements moving forward.

Joseph Israel, EVP, Operations

Remember that Krotz Springs, even with high sulfur diesel, competes well in the Gulf Coast area, where there is plenty of demand for this product type.

Roger Read, Analyst

Thank you.

Operator, Operator

Our next question is from John Royall with JPMorgan. Please go ahead.

John Royall, Analyst

Hi, good morning. Thanks for taking my question. My first one is to follow up on the capital allocation. Given your parent net debt position, which you've discussed, what impact will a lower crack environment have on capital allocation priorities? Would you consider leveraging up a bit to maintain strong returns on capital?

Avigal Soreq, President and CEO

Thank you for the question, John. We will remain disciplined. Our focus is to maintain a dividend through the cycle. If capital allocation permits, we will actively choose to return value to shareholders through buybacks or other means when opportunities arise. We maintain the necessary tools and are committed to quality returns.

John Royall, Analyst

Great. Thanks, Avigal. In the last quarter, you referenced some high returning projects in refining that you were evaluating for next year. Could you provide some color on those projects?

Avigal Soreq, President and CEO

We don't want to get ahead of ourselves; we're finalizing planning for 2024 with our Board of Directors. We have encouraging projects but will disclose more once we can.

Joseph Israel, EVP, Operations

They are all low-cycle return type of projects that fund themselves in less than 24 months, focusing on liquid yield recovery.

John Royall, Analyst

Thank you very much.

Avigal Soreq, President and CEO

Thank you.

Operator, Operator

Our next question comes from Jason Gabelman with Cowen. Please go ahead.

Jason Gabelman, Analyst

Yes, good morning. I wanted to extend my thoughts; I hope everyone's families are safe. I wanted to ask first about the supply and marketing line item. I know you provided some guidance around that last quarter. It's been a bit volatile from quarter to quarter. How much of that results from trading? It seems like 2Q was a stronger trading quarter than 3Q; should we expect that volatility in your new line item?

Avigal Soreq, President and CEO

Thank you for the kind words. In regards to trading, we are looking to reduce risk rather than add risk to the process. We understand that increased oil prices can create some volatility. We aim to manage that risk through our processes, thus focusing more on sustainability and less on speculative trading.

Jason Gabelman, Analyst

To clarify, volatility won’t necessarily reverse each quarter?

Avigal Soreq, President and CEO

Right. As we implement these strategies, we expect some measure of volatility, but we aim to manage that effectively.

Jason Gabelman, Analyst

That's very helpful. My follow-up pertains to the strategic unlocking of value. Should I assume you're still focused on deconsolidating DKL's debt given the plan you've laid out? Can you discuss the timeframe surrounding this?

Avigal Soreq, President and CEO

You're correct about our goal. I'm not committing to a specific timeline because we want to ensure we execute the deal properly while maximizing value for shareholders. We are decisive in our commitment to stay the course.

Jason Gabelman, Analyst

Thank you.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Avigal Soreq for any closing remarks.

Avigal Soreq, President and CEO

Sara, thank you for leading our call today. I want to extend my thanks to my colleagues around the table for a great quarter, to our Board of Directors, and most importantly to our employees and investors for their continued support. We'll be back next quarter to report again. Thank you, and have a good day.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.