Gevo, Inc. Q4 FY2020 Earnings Call

Welcome to Gevo's Fourth Quarter 2020 Earnings Conference Call. My name is Carmen, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that today’s conference is being recorded. I’ll now turn the call over to Geoff Williams, Gevo’s Vice President, General Counsel and Secretary. Please go ahead, Mr. Williams.

Good afternoon, everyone, and thank you for joining Gevo’s fourth quarter 2020 earnings conference call. I would like to start by introducing today’s participants from the company. With us today is Patrick Gruber, Gevo’s Chief Executive Officer; and Carolyn Romero, Chief Accounting Officer. Earlier today, we issued a press release that outlines the topics we plan to discuss today. A copy of this press release is available on our website at www.gevo.com. I would like to remind our listeners that this conference call is open to the media and that we are providing a simultaneous webcast of this call to the public. A replay of today’s call will be available on Gevo’s website. On the call today and on this webcast, you will hear discussions of certain non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the press release distributed today, which is posted on our website. We will also make certain forward-looking statements about events and circumstances that have not yet occurred, including, but not limited to, projections about Gevo’s business development plans and operating activities for 2020 and beyond. These forward-looking statements are based on management’s current beliefs, expectations and assumptions, and are subject to significant risks and uncertainty, including those disclosed in Gevo’s Form 10-K for the year ended December 31, 2020, that was filed with the US Securities and Exchange Commission, and in subsequent reports and other filings made with the SEC by Gevo, including Gevo’s quarterly reports on Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements. Such forward-looking statements speak only as of today’s date and Gevo disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise. On today’s call, Pat will begin with a discussion of Gevo’s business developments, and then Carolyn will review Gevo’s financial results for the fourth quarter of 2020. Following the presentation, we will open up the call for questions. I’ll now turn the call over to Pat.

Thanks, Geoff. Hello, everyone. I'm going to keep this relatively short today because tomorrow we're doing another fireside chat. Those who join us will hear Lynn and I discuss more information around financing, projects, and how to think about them, etc. But back to reporting on this year. We've had quite a change from a year ago, so I'm going to run through a partial list. Now we sold out the capacity to a large commercial plant using take-or-pay contracts that are suitable for use in backing of project debt financings. These contracts add up to more than 45 million gallons per year of hydrocarbons. That off-take caused us to think bigger and sooner. We also paid off all of the white box debt, advanced the development of our renewable natural gas project, and figured out how to make net-zero hydrocarbon products by using a mix of renewable energy with our process, which is targeted for our net-zero plant in Lake Crest, South Dakota. We have $530 million of cash on the balance sheet and no material debt. That money should enable us to develop multiple plants and make the full equity investment in our Net-Zero 1 plant rather than being dependent upon a third-party. We also have the cash and the balance sheet that should allow us to sponsor significant equity investments in future Net-Zero plants such as Net-Zero 2 or Net-Zero 3 projects. We've worked with Citigroup to figure out a potential bond offering that we may use to finance our debt for the Net-Zero 1 project. That's taken a lot of work to actually work through that, and they have a very attractive solution in line. We have work to do to get ready for it still. Now, we shut down our ethanol plant. It lost money due to the poor market conditions and it wasn't a core focus for us. We've been told by some new investors that they now understand that we aren't an ethanol company. Well, that's good. That eliminates confusion. We aren't an ethanol company. We're all about renewable energy into energy dense liquids, hydrocarbons, with a net-zero footprint. Our customer pipeline has grown significantly from last year and continues to grow. Importantly, we have proven that we can establish pricing in take-or-pay contracts that work for our customers and for ourselves, resulting in meaningful take-or-pay contracts. These take-or-pay contracts are backed by our balance sheet or letters of credit from our customers. That's a big accomplishment. We announced our Net-Zero 1 project, which is slated for Lake Present, South Dakota, and will produce roughly 400 million pounds per year of value-added protein-rich animal feed, about 30 million pounds of corn oil, and 45 million gallons per year of energy dense liquid hydrocarbons. These hydrocarbons will produce gasoline and jet fuel products that, when burned, have a net-zero greenhouse gas emission throughout their lifecycle, taking into account capturing CO2 from the atmosphere, the farming practices, energy sources, and transportation of the products. The hydrocarbon products produced at our plant are expected to score more than minus 70 in their carbon footprint. But when burned as fuel for transportation, the entire cycle would achieve net-zero according to the leading science-based life cycle model called GREET, developed by Argonne National Lab. So how do we achieve net-zero? It's all about two things. First, paying attention to how things are grown, incorporating practices such as low till and no till, as well as precision agricultural techniques where farmers apply only the necessary chemicals, not excess. Second, eliminating dirty electricity and fossil-based natural gas from our production processes. Net-zero is being designed to be off the grid, avoiding dependence on fossil-based energy. We are putting in a water treatment plant that is expected to generate enough biogas to meet the thermal demands of the plant and provide enough excess gas to generate about 30% of our electricity with a combined heat and power unit. We plan to meet the remaining 70% of our electricity needs through a related wind project that we are developing with Juhl Energy, as we aim to avoid the dirty electricity typically found on the grid in this country. Additionally, we expect to utilize our green electricity to generate green hydrogen for our production processes. We have yet to decide if we will produce excess hydrogen for the marketplace. Our negotiating power has also strengthened, meaning that strategic partners approach us differently now. Should we work with strategics, we will be able to negotiate more balanced deals than in the past, when we had to rely on others for support. Yes, several parties are in discussion with us, but we can't provide further details at this time. What can we expect in 2021? We anticipate signing more take-or-pay customer contracts and securing support for Net-Zero 2 and Net-Zero 3. We already have attractive production sites selected, with options under letter of intent. We expect to announce specifics for these sites after disclosing our next set of off-take contracts. Net-Zero 2 and Net-Zero 3 will likely resemble Net-Zero 1. We also expect to begin construction of our renewable natural gas project, which will produce 355,000 million BTUs by converting manure from more than 20,000 dairy cows into renewable natural gas. This project will require about $75 million, and we project a return of over 30% IRR based on conservative estimates. We expect the project to come online and start generating profit in the fourth quarter of next year. In the near term, the gas will be sold to the California market. Once Net-Zero 1 begins operating, we may redirect some of that gas to further lower carbon scores, or we may continue supplying the California market; that's a future economic optimization question. To finalize the project finance deal for Net-Zero 1, we need to have capital cost estimates at plus or minus 10% or so accuracy. The engineering and design work is currently underway, with our engineering partners having around 50 people working on it. We are grateful to have the funds to execute this properly. The capital cost for Net-Zero 1 is currently estimated at about $650 million, which includes production plants, water treatment plants, and energy complex. On a fully installed project finance basis, the total project cost is expected to be roughly $800 million, accounting for the interest during construction and the required reserves for debt financing. The IRR for this $800 million project is projected to be better than 20%. We must finalize the engineering design work and refine the capital cost to the appropriate precision to enable the debt financing of Net-Zero 1. Completing this is a prerequisite and is expected to take until the end of 2021. We anticipate closing a bond deal in the first half of 2022. The capital cost for the Net-Zero 1 project could fluctuate based on adjustments, scope of equipment costs, or design refinements. The construction of Net-Zero 1 will take about two years, which is standard for such capital deployments. One positive note is that the engineering and design cycle for Net-Zero 2 and 3 will be considerably shorter, as they will be based on Net-Zero 1. It should be understood that our business is significantly de-risked. We have the funds to execute our plans meaningfully now, unlike last year when we had to raise money just to keep operations running. If we raise additional funds, it will be aimed at expanding our large cash flow streams anticipated from our net-zero projects or R&D initiatives. Tomorrow, Lynn Smull and I will participate in a fireside chat with Water Research to discuss project economics and financing for both the Net-Zero 1 project and the RNG project, answering investor questions. Information on registration can be found in the Investors section of our website, investors.gevo.com. Now I will turn it over to Carolyn, who will take us through the financials. Carolyn?

Thank you, Pat. Gevo reported revenue in the fourth quarter of 2020 of $0.5 million, as compared to $6.9 million in the same period in 2019. During the fourth quarter of 2020, hydrocarbon revenue was $0.4 million compared with $1.0 million in the same period in 2019. Hydrocarbon sales decreased due to lower shipments of finished products from our demonstration plant at the South Hampton Resources Inc. facility in Silsbee, Texas. During the fourth quarter of 2020, revenue derived from the Luverne Facility from ethanol sales and related products was $5,000, compared to $5.9 million during the same period in 2019. As a result of COVID-19 and in response to an unfavorable commodity environment, we terminated our production of ethanol and distillers grain in March 2020, leading to lower fourth-quarter sales. Cost of goods sold was $2.0 million in the fourth quarter of 2020 versus $9.4 million in the same period in 2019. Cost of goods sold included approximately $0.9 million associated with production of IBA and related products and maintenance of the Luverne facility, along with approximately $1.1 million in depreciation expense. Gross loss was $1.4 million for the fourth quarter of 2020 versus $2.5 million for the fourth quarter of 2019. Research and development expense increased by $1.7 million during the fourth quarter of 2020 compared with the same period in 2019, primarily due to an increase in consulting and personnel expenses. Selling, general and administrative expense rose by $0.2 million during the fourth quarter of 2020 compared to the same period in 2019, primarily due to an increase in consulting and personnel costs, offset by a decrease in Investor Relations and marketing costs. In the fourth quarter of 2020, we reported a loss from operations of $7 million compared to $6.2 million for the same period in 2019. For the fourth quarter of 2020, cash EBITDA loss—a non-GAAP measure calculated by adding back depreciation and non-cash stock-based compensation to GAAP loss from operations—was $5.1 million compared to $4 million in the same quarter of 2019. Interest expense for the fourth quarter of 2020 was $0.5 million, a slight decrease compared to the same period in 2019 as a result of lower amortization of original issue discounts and debt issuance costs and the conversion of $2.0 million of 2020/2021 notes to common stock during July 2020. In December 2020, we converted the remaining $12.7 million of 2020/2021 notes into common stock. For the fourth quarter of 2020, we reported a net loss of $18.1 million, or a loss of $0.15 per share based on a weighted average shares outstanding of 120,017,120. This compares to a loss of $6.8 million in the fourth quarter of 2019 or a loss of $0.50 per share based on weighted average shares outstanding of 13,659,944. Additionally, in the fourth quarter of 2020, we incurred a $1.4 million non-cash loss related to the conversion of $12.7 million of 2020/2021 notes into common stock. Over the 30 months ending December 31, 2020, we recognized a non-cash loss totaling $8.6 million due to changes in the fair value of our 2021 notes embedded derivative liability, arising from the increase in the price of our common stock prior to the conversion of the $12.7 million of the 2021 notes. Adding back these non-cash losses resulted in a non-GAAP adjusted net loss of $8.1 million in the fourth quarter of 2020, or a non-GAAP adjusted net loss per share of $0.07 based on a weighted average of 120,017,120 shares outstanding. This compares to a non-GAAP adjusted net loss of $6.8 million in the fourth quarter of 2019, while the non-GAAP adjusted net loss per share was $0.50 based on a weighted average of 13,659,944 shares outstanding. Now, I will turn it back over to Pat to wrap things up.

Thanks, Carolyn. Let's open up the call for questions. Operator?

Thank you. Our first question is from Amit Dayal with H.C. Wainwright. Please go ahead with your question.

Thank you. Hi, Pat. Good afternoon, everyone. Appreciate you taking my question.

Hey, how are you doing?

Good. Thank you, Pat. So I'll save some of my questions around the project for the call tomorrow. But just in terms of the timeline you've provided, one—the first half of 2022 for the financial close of Net-Zero 1, is this sort of a typical timeline for something like this? And could this potentially be accelerated if things fall in place as you expect?

I would say that the critical timeline runs through getting the engineering estimates done. We don't know what the capital cost is and what we're asking for in terms of debt support until that's pinned down. You got to have that solidified or you can't proceed with debt financing. We also have to complete permitting and assorted tasks. We're working to get those things done by the end of this year. Thus, we should be able to do the bond offering early next year. But because that timeframe is quite a bit out—less than a year from now, right?—there's uncertainty surrounding it. Thus, the lawyers advised me to present a broad timeframe, first half of the year. Boom, that’s the answer. I want it sooner, of course. I want it completed. And I am very impatient when it comes to this.

Understood, Pat. Thank you for that. And then our model currently for Net-Zero 1 has some level of utilization coming online by 2024. Is that a reasonable assumption?

It is. That's the right assumption.

Okay. Perfect.

Yes. So in other words, even if we finance in the first half of the year, we still plan to get the plant online in 2024. We've obviously built slack time into the schedule. This is one of those things where ensuring the design is correct allows us to plan effectively, procure equipment properly, and potentially build in modules to shorten construction timelines. That's the sort of thing we're figuring out. But yes, we aim for that first part of 2024, just as your model states.

Understood. And with respect to Net-Zero 2 and Net-Zero 3, you're considering those options now. Is clarity on this likely to come in 2022, or could we see details on progress around these efforts earlier than 2022?

I would expect to have progress in 2021 on those items. We will get contracts signed, have sites selected, and I expect to announce the Net-Zero 2 site and customers in 2021. Do I think we could get a Net-Zero 3 site in that timeframe? I think it's quite probable. We've heard Tim Cesarek discuss this a few weeks ago in the fireside chat, where he mentioned the possibility of us doing six plants in short order. Well, that's accurate, but we need to complete the work and duties before that. I foresee several plants in play simultaneously. The firms we're partnering with on engineering and construction can handle that scale of execution. The trick is to ensure that the design is correct, as it will influence Net-Zero 2 and Net-Zero 3. We don’t want to be making changes during construction. People often ask why we don't just take over an ethanol plant. The answer is, do you have the schematics for that plant? We need to learn that from scratch. Each plant is unique. Our goal is to create a cookie-cutter approach to accelerate timelines. We are quite determined about this, as we believe it’s the best way to generate substantial cash flow for the company over the long term since we value those cash flows highly.

Understood. Just one last question for me, Pat, regarding the renewable natural gas opportunity. The initial effort appears to be focused on your upcoming facility and your own consumption to lower carbon intensity, but could this develop into a larger ambition for the company regarding revenue scaling beyond your initial efforts?

That's a very insightful question. What happened is that we started working on the RNG project in Northwest Iowa, intending to supply it to our Luverne facility. However, the demand for our products exceeded the scale of Luverne. We would have had to redo numerous permits in Minnesota, which would have extended our timelines significantly. This led us to the greenfield plant in Net-Zero 1. As we considered it further, we realized we could make Net-Zero 1 energy sufficient and generate our own biogas on site. That decreased our need for the Northwest Iowa RNG. Nevertheless, we've already done significant development work there, so we're proceeding with that as well. In essence, we have learned how to be developers of renewable natural gas; we are definitively entering that business. This 355,000 million BTUs is initially going to be marketed in California. There may come a time when we could use that gas for our operations, whether at Net-Zero 1, Luverne, or potentially at Net-Zero 2 or 3. It provides us with valuable flexibility. We are advancing our capacity to develop projects that others may find challenging. If selling to California proves successful, this will increase our cash flow significantly, which is appealing. Overall, I see Gevo as a company focused on renewable energy transformed into energy dense liquids. By supplanting fossil-based natural gas, we are reducing the fossil-based footprint; more production is beneficial for us. If we take that gas to Net-Zero 1, we could produce a significantly negative greenhouse gas emission liquid transportation fuel, which is impressive.

All right. Understood. That’s all I have. Thank you so much. I’ll see you in the quarter.

Sure.

Thank you. Our next question comes from Poe Fratt with Noble Capital Markets. Your question please.

Yeah. Good afternoon, Pat.

Hey, Poe.

If I could get one quick question out of the way: What's your current share count right now?

I believe it's 198 million shares.

Okay. So it hasn't changed much since the end of January. And then...

No, it hasn't changed at all since the end of January.

Yes, I was thinking maybe some of the warrants might have been exercised, because I think you still had some warrants out there, right?

Yeah. You know what? The number that I have is still the same old number on my slides that show up from Carolyn.

It's the same.

Okay. And then on the RNG, Pat, you mentioned $70 million to $75 million as far as CapEx. Have you — and you're working on the financing, have you figured out? Is it 70-30 as far as debt equity? And how much equity are you going to end up putting into that plant?

Okay. We're going to talk about this tomorrow at the fireside chat, but here's the preview. We don't have to put any more cash into it. We already did the development work. In fact, we're going to get a rebate when we close that deal; we'll get money back. So it's already somewhat of a done deal and the financing’s arranged. We should start seeing meaningful cash flow by the fourth quarter, with some revenue early next year. Construction is set to begin—we're getting organized right now for that. We'll break ground soon and make announcements regarding that.

Yes. Just two quick ones. Do you have an estimate of how much cash you might be able to get out of that once financing is done? Also, will the start-up be in the first quarter or the fourth quarter of 2022?

It will start up—in the first quarter of 2022.

That's Lynn, sorry. Yes, we'll start in the first quarter, but the cash flow will be somewhat back-end loaded because of how the LCFS credit system operates. However, we expect cash distributions from the project to be in the range of $10 million based on very conservative assumptions regarding carbon score and completion costs. We believe we can exceed that amount on the capital costs.

What's the range of outcomes, do you think? I know we took a really conservative approach as we estimated our figures, since we're thinking about the long-term implications, particularly in relation to net-zero plants. But if we simply sold to California and everything worked out 잘, how much do those projections shift?

The range is about $9 million to $16 million depending on the carbon intensity score. The returns can vary from 30% to the high 60s based on various parameters including capital expenditures.

Does that clarify things for you, Poe?

Yes. No. I was thinking that you had about $20 million in outlays before everything?

We don't need to invest any additional cash into it, because we've previously spent about $8 million on development, including equipment and engineering costs. We'll recover that upon closing the financing. Additionally, no further net cash will be pulled from our balance sheet for completing the construction of the RNG project.

Great. And can you provide me with a budget estimate for your feed work, whether that's a cost estimate or a budget, and how much you expect to spend on the feed work?

For Net-Zero 1, that's $15 million.

Okay. And then, Pat, it was helpful that you provided the soft and hard cost estimates: the hard cost of Net-Zero 1 is $650 million, and the soft costs stand at about $150 million right now.

Right.

Can you clarify whether you need to achieve a cost estimate of plus or minus 10%? Are you currently at approximately plus or minus 50%? I noticed a footnote in your presentation stating it was plus or minus 50%. Could you help me reconcile that goal with your current position?

Yes. Different segments of the process are at varying stages of reliability. For instance, as we've began planning for how to build out Net-Zero and reduce our dependence on fossil energy, we recognized that a water treatment plant is crucial to incorporate. So, we're evaluating that. Some segments of the project are very well defined, while others are still being finalized. As we work through this, we aim to drive uncertainty down and pin down every aspect accurately. This includes assessing bids on equipment and determining accurate costs—this isn't trivial, as this is a large-scale plant. Our aim is to coordinate the essential pieces properly and rapidly.

Okay. And maybe I'll pose the cash burn question a little differently. Have you determined how much equity you're going to put into Net-Zero 1, or is it still a moving target due to the lack of finalized capital cost estimates?

From the CEO's perspective, I’ll simplify: we're committing to 100% equity investment in the Net-Zero 1 project unless a fantastic deal is presented to us. If that happens, we'd consider splitting cash flow streams. Keep in mind, we're in the green; we forecast the cash flow stream to yield approximately $100 million a year in EBITDA at the project level, so why would we share that? If strategic partners add value, we might reconsider; it all hinges on the deal specifics. I've lived in Colorado, and when baking a cake at high altitude, it's delicate. I have my ingredients, and I don't need additional cooks interfering in my kitchen now. You can add icing once it's baked—totally welcome at the time. So, we might consider bringing in other stakeholders for equity prior to closing, but we will proceed with caution. We can't rush in, as too many cooks spoil the broth and lead to timeline errors. Lynn, perhaps you can offer additional insight regarding your outlook and models?

Sure. The debt work we've conducted with Citi has been extensive, affirming that we qualify for private activity bond issuance, which is tax-exempt and very favorable for projects we’re backing like Net-Zero 1. We anticipate achieving approximately two-thirds leverage. At the end of the day, we expect to contribute around $250 million in equity if we take on 100% of the equity for that project. I'd like to note that we often don't account for various fees that we wouldn't charge if the project were 100% equity. However, if it's a partial equity deal, then we will set fees for licensing, operations, and project management. These fees would add extra value to Gevo's bottom line.

That’s helpful, Lynn. And that figure of $250 million in equity, that's slated for a 2022 event, right?

That's correct.

Do you have an idea of what your cash position will look like at the end of 2021? You currently have $531 million on hand.

Our budgeting for the development of Net-Zero 1 assumes completion and financing closure at the end of 2021. While this won’t happen, this is how we're budgeting. We're including costs for long-lead equipment deposits to adhere to that completion schedule that Pat discussed earlier for 2024. We will probably see around $45 million out by then, which can be recovered when we close financing for Net-Zero 1.

That’s very helpful. Is it $15 million on the feed or $50 million, sorry?

$15 million. I want to clarify that the design at this stage is about our process. We need to go through detailed analyses on mass and energy balances. These are critical engineering discussions that inform how we optimize our process. Our emphasis is on minimizing the carbon footprint while maximizing our carbon score, as that's how we generate profit. The design phase entails holistic evaluations to ensure every unit operation is appropriately sized and planned. We must source equipment and estimate its procurement accurately, which is a significant task given the size of the project. Therefore, we engage in various design aspects concurrently and finalize them as quickly as we can.

Okay. I might ask one last thing about the RNG project. You previously indicated that the off-take customer could potentially be a recognizable partner, which would represent a significant move. Are you ready to discuss who that might be yet, or should we wait until financing is pinned down?

Yes. We need to finalize that contract before making any announcements.

Okay. And just a couple more questions, if you don't mind. It appears you've identified potential sites for Net-Zero 2 and 3, including a site in Florida. Could you give insight on Florida from a strategic standpoint?

Yes. As demand increases, we engage with parties under confidentiality agreements, so customers and partners often have discussions with us under such constraints. Corn in the Midwest is a low-cost sustainable source for the carbohydrate residuals needed for our hydrocarbon products, with favorable wind and biogas resources. The Midwest is a logical choice. In Florida, various feedstocks such as molasses and sugar residues show potential. We have received inquiries about possible sites there, and we are assessing those opportunities. More options may emerge as we evaluate how they can supply carbohydrate sources sustainably and cost-effectively, with manageable acquisition risks. The Florida site has advanced to the evaluation stage, hence its inclusion on our map.

Great. And could you help me understand the significance of the MoU you signed with HCS and how that fits into the overall plan?

Sure. We have announced an agreement with HCS, Haltermann Carless, a manufacturer of specialty fuels, wherein we will license our technology to them for hydrocarbon production in Speyer, Germany. This will leverage their facility, and we will be involved in arranging isobutanol production somewhere in Germany, probably along the Rhine River, or elsewhere in Europe. We need to finalize more details regarding the jet fuel project in Germany, while we’ll also be co-marketing that as we’re very specific about how we position products in the market to ensure sustainability. In Europe, unlike in the U.S., it's acceptable for the isobutanol plant to be separate from the hydrocarbon plant, allowing for more flexible logistics. Here, EPA standards require them to be integrated to gain RFS credit. There’s potential here for a synergistic relationship as we explore different frameworks.

Great. Just one last observation: Wind prices seem to be increasing significantly. How does that impact your development plans?

Yes, it does affect development broadly, potentially in a positive way. We generally work with average prices and futures when reflecting on our economic projections. But if real wind prices rise, that's favorable for us. As long as green momentum continues, we gain advantages. RINs, LCFS credits, tax incentives—we stand to benefit. An increase in oil price is also beneficial to us. With rising corn costs, protein prices will likely follow, improving our margins. It's an understanding that these dynamics contribute favorably to our revenue potential, especially given that we are positioned to take advantage of RIN opportunities. We get 1.6 times the RINs—compared to the baseline ethanol which gets just 1.0 times. Rising RIN prices heighten our margin potential, driving profitability.

Great. Thank you so much. I'm looking forward to tomorrow's presentation.

Sure.

Thank you. I don't have any further questions in the queue. I would like to turn it back to Pat for his final remarks.

Thank you all for listening to us. These are exciting times, and please join us for the fireside chat tomorrow where we’ll address a range of questions, moderated by Shawn Severson, but I will likely jump in as well. We appreciate your support for the company. We are starting this year on a strong note, and it is truly a blessing compared to last year. We are intent on making progress and driving Net-Zero 1 online, and I expect Net-Zero 2 and 3 to follow suit. We have our eyes set on our R&D efforts, and we are evaluating whether to expand our projects further. Thank you for listening today. Goodbye.

Thank you, ladies and gentlemen, for your participation in today's program, and you may now disconnect. Have a great day.