Earnings Call Transcript - SE Q2 2023

Operator, Operator

Good morning and good evening. Welcome to the Sea Limited Second Quarter 2023 Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Ms. Minju Song. Please go ahead.

Minju Song, Group Chief Corporate Officer

Hello, everyone, and welcome to Sea's 2023 second quarter earnings conference call. I'm Minju Song from Sea's Group Chief Corporate Officer's office. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release. Also, this call includes the discussion of certain non-GAAP financial measures, such as adjusted EBITDA. We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures. For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAAP financial measures in our press release. I have with me Sea's Chairman and Group Chief Executive Officer, Forrest Li; Group Chief Financial Officer, Tony Hou; and Group Chief Corporate Officer, Yanjun Wang. Our management will share strategy and business updates, operating highlights, and financial performance for the second quarter of 2023. This will be followed by a Q&A section in which we welcome any questions you have. With that, let me turn the call over to Forrest.

Forrest Li, Chairman and CEO

Hello everyone and thank you for joining today’s call. In the second quarter of 2023, we delivered strong results, building upon many of the key initiatives we shared previously. We are pleased to see positive developments across all three segments of our business during the quarter. Shopee continued to enjoy significant improvement in margins and strong growth in revenue year-on-year. As we started to ramp up growth for Shopee, it saw a double-digit increase in gross orders quarter-on-quarter. Garena showed sequential active user and paying user growth with bookings demonstrating more signs of stabilization. Moreover, Free Fire also started to see quarter-on-quarter growth in bookings. SeaMoney continued to achieve both strong growth and profitability while maintaining a relatively stable risk profile. As a result, at the group level, we saw not only top-line growth but also significant bottom-line improvement from the previous year, with our cash balance, which includes certain short-term and treasury investments, further strengthened to $7.7 billion. In the past couple of quarters, we have not only achieved self-sufficiency, but also demonstrated the profitability of our model and our ability to manage fast and significant shifts in operational focus as we see fit. Given this, we have strengthened our execution capabilities and increased the stickiness of our ecosystem. We believe we are now on firmer footing to better serve our communities. Meanwhile, the economies of our region have remained resilient with inflation largely under control. This further boosts confidence in the long-term growth prospects of our markets. We are also excited to see recent ecosystem developments in diversified user engagement through live streaming and short-form videos as well as affiliate programs, which already brought new growth to Shopee. Such developments in our ecosystem offer us further opportunities to expand our long-term profitable TAM. Given these positive developments and trends, we have started, and will continue, to ramp up our investments in growing the e-commerce business across our markets. Such investments will impact our bottom line and may result in losses for Shopee and our group as a whole in certain periods. However, this does not change our unwavering emphasis on self-sufficiency and improving cost efficiency as a key competitive moat. Moreover, we believe that the efficiency gains and stronger footing we have achieved through our past efforts have further strengthened our ability to invest efficiently in growth. Most importantly, we will remain highly agile and prudent by closely monitoring the conditions of each market and adapting our focus and pace accordingly from period to period. As I discuss Shopee’s performance later, I will further elaborate on some of our focus areas in the near term. With that, let us now discuss each business segment in more detail. Starting with e-commerce. As we mentioned in past quarters, we have been highly focused on reducing our ecosystem’s cost to serve and improving the user experience for both our buyers and sellers. During the second quarter, we made important progress on both fronts. In the quarter, we further improved the efficiency of our logistics operations and expanded our network and capabilities across our markets. New initiatives such as improved digitalization of scheduling and tracking of orders also enhanced the user experience. More delivery options have been launched to address user preferences as well. For example, in Singapore, we have recently added an additional 600 collection points across a variety of retail locations to the existing 1,000 self-collection lockers to offer more delivery options to users. In Taiwan, we installed lockers with 24-hour access at around 150 convenience stores with plans to scale this pick-up option across the market. These efforts have resulted in lower logistics costs including manpower costs, and better delivery experience across our markets. We believe that a highly cost-effective and seamless logistics operation can serve as a key competitive advantage for us. Our efforts certainly go beyond logistics and include all parts of our users’ e-commerce journey, which have become our competitive moats as the leading integrated marketplace in our region. We will remain highly focused on lowering the cost to serve for the entire ecosystem while continuing to improve user experience over the long run. We also improved our user engagement metrics this quarter, further cementing Shopee’s position as the e-commerce platform of choice. For example, we have focused on growing our live streaming feature, driving significantly higher participation from buyers, sellers, and creators in the second quarter. The feedback from our efforts was highly positive, reflecting the strong demand and high satisfaction for this feature from our users. Indeed, during July’s 7.7 live streaming focused campaign in Indonesia, we recorded a 12x growth in transaction volume and a 10x increase in the number of buyers during the campaign, as compared to a normal day. For the 8.8 shopping campaign, around one-quarter of our Indonesian buyers watched live streams on Shopee Live and made close to 5 million orders in a single day. In fact, Shopee has already become the leading live streaming e-commerce platform in Indonesia based on a report by Populix. We also significantly grew the pool of influencers and content creators through our Shopee Affiliate Program. This in turn enables us to efficiently attract more buyers to our platform. These affiliate partners are carefully recruited by our team and can choose to work with us directly or with the sellers on Shopee to promote products to their communities. Feedback from our efforts has been very positive and we are starting to see a tangible boost to our GMV and revenue from this initiative. Indeed, over the course of the second quarter, over one million influencers registered with the program. Meanwhile, we have been attracting more new users to our platform, especially including those from the less accessible areas of our markets. We believe we are unique in having the full capabilities to service the mass market with the broadest coverage with our low cost to serve and strong owned infrastructure. We have also broadened our assortment of products for our core categories such as fashion, health, and beauty to further enhance our competitive moat in the long tail categories. As a result of our user-focused efforts, buyer Net Promoter Score on Shopee improved by 10% over the course of the second quarter. For sellers, we continue to improve support by upgrading our services and tools to provide a more seamless onboarding process, more attentive seller management, and better seller tools and services. We also provide our sellers with more upskilling and training opportunities to improve their competitiveness. For example, we have conducted hundreds of daily classes and camps to train our sellers and organized knowledge sharing events this year in Malaysia. Our Shopee on the Road initiative brings free in-person training to sellers across Brazil. We partnered with Thailand’s Creative Economy Agency and other industry participants to help introduce artisan products produced by local Thai communities to our global buyers and provided business training and marketing support to these Thai sellers. In summary, as we look back on the past few quarters, I am very pleased and highly encouraged by the progress made. Having significantly improved our efficiency and unit economics over the past few quarters, we have become the first and only e-commerce marketplace in Southeast Asia with a proven profitability record at scale. This track record shows our ability to manage profitability and growth in each market as we see appropriate, based on market conditions. More importantly, this ability puts us on a much stronger footing and positions us well for maximizing our long-term potential in each market. We now have a more adaptive and efficient organization, supported by our strong market leadership and financial position, and underpinned by a resilient macro outlook. As shared earlier, we believe now is the right time to start reaccelerating our investments in growth. The early signs are encouraging. Gross orders in the second quarter grew by more than 10% quarter-on-quarter driven by growth in both active buyers and buyer purchase frequency. Looking ahead, as we reaccelerate investments in growth, our strategic focus to build cost leadership and continually improve user experience remains key to our long-term success. We believe that the learnings from the past help us to be even more effective in executing our strategy. We plan to stay highly agile in adapting to user preferences as well as the ever-evolving industry and competitive trends to strengthen our leading position. Moving on to digital entertainment. Garena’s performance in the second quarter was encouraging as the positive trends in the previous quarter continued to play out. During the second quarter, both quarterly active users and quarterly paying users grew quarter-on-quarter as Free Fire showed sustained signs of improvement in user retention and engagement. Bookings for the game also grew quarter-on-quarter for the first time in the past seven quarters. These recent trends are encouraging signs of Free Fire stabilizing while remaining one of the largest mobile games worldwide and we will continue to closely monitor if this is the beginning of a longer-term stabilization of the game. In recent months, we have continued to improve core user experience and optimize features and content to ensure a more seamless gaming experience for all users. We also refreshed the gameplay of Free Fire, particularly around characters and maps. We recently celebrated Free Fire’s sixth anniversary with many community events that our growing user base found highly engaging. There have been sustained healthy trends across our existing long-running franchises, and we will continue to build upon these successes. One of Garena’s key competitive advantages is our ability to bring best-in-class game experiences to users across diverse markets. We have repeatedly demonstrated how we build deep, lasting engagement with our users, particularly through games involving complex genres and gameplay, even if they are using low spec devices. And we are confident that we can further capitalize on this as we bring more new games to our key markets. Lastly, on our digital financial services business. SeaMoney’s second quarter performance was strong as we continued to expand our features and product offerings across the business. We are also increasingly seeing growing benefits from the synergies between the Shopee and SeaMoney ecosystems. More importantly, our progress has enabled us to provide underserved segments of our markets with better access to financial services and products. In the second quarter, GAAP revenue grew 53% year-on-year, driven by our credit business. Profitability in terms of adjusted EBITDA also continued to improve meaningfully on both a year-on-year and quarter-on-quarter basis to reach $137 million, while we maintained a stable and healthy risk profile with nonperforming loans past due by more than 90 days remaining at around 2% of our total gross loans receivable. Over the past quarters, we continued to refine our risk policies with respect to customer credit and selection. Alternative funding from third parties for our credit business also grew as a portion of our loan book as we continue to diversify the sources of funding. We have seen progress made in further developing our digital bank offerings. Our bank in Indonesia has expanded its service offerings, making our services even more convenient for our users. For instance, the bank app is now compatible with QRIS, a local QR code standard, and connected to BI Fast, a real-time simplified bank transfer service, to enable easier and faster payments and transactions for our users. Users can now purchase digital products such as mobile data and pay utilities or credit card bills through our bank app. Meanwhile, we have further integrated the bank into our broader ecosystem through our direct debit feature where Shopee buyers can make payments on Shopee directly from their bank account with us. As a result of our user-friendly UI and UX design, the rating for our bank app reached over 4.8 stars on both Apple and Google app stores, one of the highest among banks. With our expanded offerings and products, we continue to focus on serving the underserved financial needs across our markets and collaborating closely with our ecosystem partners to ensure the healthy and sustainable growth of our business over the long run. To conclude, we have made strong progress over the last quarters in our efforts to enhance our efficiency, improve user experience, and solidify our market leadership. As we ramp up growth with efficiency, prudence, and agility and continue to strengthen our fundamentals, we are better positioned than ever to capture the sustained opportunities across our businesses and markets. We believe our efforts will translate into even greater defensibility and profitability for our business as a whole over the long term. With that, I will invite Tony to discuss our financials.

Tony Hou, CFO

Thank you, Forrest, and thanks to everyone for joining the call. We have included detailed financial schedules together with the corresponding management analysis in today’s press release. So, I will focus my comments on the key metrics. For Sea overall, total GAAP revenue increased 5% year-on-year to $3.1 billion. This was primarily driven by the improved monetization in our e-commerce and digital financial services businesses. Our group total adjusted EBITDA was $510 million, compared to an adjusted EBITDA loss of $506 million in the second quarter of 2022. On e-commerce, our second quarter GAAP revenue of $2.1 billion included GAAP marketplace revenue of $1.9 billion, up 28% year-on-year, and GAAP product revenue of $0.2 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transaction-based fees and advertising revenues, was $1.2 billion up 38% year-on-year and 7% quarter-on-quarter as a result of both increases in advertisement uptake by sellers on our platform and commission rates. Value-added services revenue, mainly consisting of revenues related to logistics services, was $0.6 billion up 11% year-on-year. On a quarter-on-quarter basis, value-added services revenue declined 7% as we began to reaccelerate growth during the quarter and increased investments in shipping subsidies programs. E-commerce adjusted EBITDA was $150 million in the second quarter of 2023, compared to an adjusted EBITDA loss of $648 million in the second quarter of 2022. The improvement was driven by increased monetization and greater operating cost efficiencies. For our Asia markets, we achieved an adjusted EBITDA of $204 million during the quarter, improving substantially from a loss of $316 million in the same period last year. In our other markets, the adjusted EBITDA loss was $54 million, narrowing meaningfully from last year when losses were $332 million. Contribution margin loss per order in Brazil improved by 83% year-on-year to reach $0.24, reflecting better monetization and higher efficiency in our operations. Digital entertainment bookings were $443 million and GAAP revenue was $529 million. Adjusted EBITDA was $239 million with quarter-on-quarter growth partly driven by the sequential increase in Free Fire bookings, which has higher margins. Digital financial services GAAP revenue was up by 53% year-on-year to $428 million. Adjusted EBITDA was $137 million in the second quarter of 2023, compared to an adjusted EBITDA loss of $112 million in the second quarter of 2022. On credit, as of the end of the second quarter of 2023, the total loans receivable on our balance sheet was $2 billion, net of allowance for credit loss of $279 million. Non-performing loans past due by more than 90 days as a percentage of our total gross loans receivable remained stable at around 2%. We recognized a net non-operating income of $108 million in the second quarter of 2023, compared to a net non-operating loss of $33 million in the second quarter of 2022. The year-on-year increase was mainly due to higher interest income in the second quarter of 2023 and investment losses recognized in the second quarter of 2022. We had a net income tax expense of $62 million in the second quarter of 2023, compared to net income tax expense of $65 million in the second quarter of 2022. As a result, net income was $331 million in the second quarter of 2023, as compared to a net loss of $931 million in the second quarter of 2022. With that, let me turn the call to Minju.

Minju Song, Group Chief Corporate Officer

Thank you, Forrest and Tony. We are now ready to open the call to questions. As usual, our Group Chief Corporate Officer, Yanjun Wang, will lead this part.

Operator, Operator

Our first question comes from Pang Vitt from Goldman Sachs.

Pang Vittayaamnuaykoon, Analyst

Two questions from me. Firstly, on e-commerce. Any comment on GMV take rate in second quarter you can provide? Can we also have a better understanding of your e-commerce strategy right now? What exactly did you see and prompt you to be more aggressive on spending now? Any change in competitive landscape? Where do you spend right now as well? Is it on price subsidies, shipping subsidies or brand campaign overall? Why is that lagging as well for this to show up in top line and objective to try to achieve, any guidance you can provide? And importantly, what is the line here, will we potentially see you go back to cash burn mode or negative EBITDA on e-commerce again on a group level? That's question #1. Question #2, on gaming. We start to see a better trend on QAU and also clear ratio. Is it safe to say that the worst is over for Free Fire, and we will likely to see some positive momentum hit forward to brought again? Any one-offs due to seasonality, due to summer holiday? And can you also walk us through the improvement for your EBITDA margin here as well? Is this a new run rate we can expect?

Yanjun Wang, Group Chief Corporate Officer

Thank you, Pang. We have many questions waiting, so I will address the e-commerce aspect regarding GMV and take rate. We are observing sequential growth in GMV and have noted that order numbers grew in double digits quarter-on-quarter. This is an early positive indication of our investments in Q2. As for the take rates, as Tony noted, we continue to see increases in advertising and spending on our platform, leading to growth in core marketplace revenue. However, our ramp-up investment in logistics is impacting VAS revenue due to GAAP accounting, which could be a continuing trend. Therefore, when discussing take rates, we encourage a focus on core marketplace take rates as VAS take rates may fluctuate based on our shipping subsidies. Regarding our accelerated growth and investment plans, we have established ourselves as the first and only profitable e-commerce platform at scale in our region, demonstrating the effectiveness of our operations and ecosystem. With our improved financial position and available resources, we feel well-equipped to refocus on growth. It’s important to remember the growth potential in our markets, which we believe still holds significant opportunities moving forward. Our recent focus on cost efficiency and overall cost management has enabled us to operate more effectively and we might leverage these benefits as we reinvest in growth. Additionally, the macro environment shows resilience in the local economy and consumer spending, creating new opportunities, especially in areas like live streaming and video-related e-commerce. We believe we are well-positioned to seize these chances due to our advantages in e-commerce capabilities and social commerce roots. We have already seen progress and benefits from our content-driven e-commerce activities and have attracted numerous top influencers and sellers to our platform, with our Shopee platform in Indonesia now likely being the largest live streaming platform in the country. We are also increasing investment in free shipping to capitalize on growth opportunities. Considering our strong operational and financial position, the favorable market conditions, and new opportunities, we believe it is an opportune time to invest in growth. While the specific impact on our top and bottom lines is still to be determined, we expect to see growth from these investments. However, we anticipate that the free shipping program may have accounting implications for total revenue. This will also affect the bottom line for Shopee and the group overall, but we have consistently shown our capability to manage growth and profitability effectively. We will closely monitor each market's conditions and potential investment areas on a case-by-case basis. Now, regarding gaming, we are pleased to see positive trends in QAU and QPU, and we are beginning to see encouraging signs for Free Fire based on booking numbers. We are watching trends closely to determine if this indicates long-term stabilization. In gaming, seasonality can indicate stabilization, and we are seeing improved EBITDA margins due to increasing Free Fire bookings compared to our other games. Overall, our EBITDA margins have remained high compared to the industry average over recent periods.

Alicia Yap, Analyst

Management. I have two questions as well. First of all, a follow-up on the gaming. Can you share with us what have you done that has been working on reengaging the user? And do you expect this user and booking growth could sustain? How should we reconcile the use of metrics in the GAAP revenue and the EBITDA trend into the second half? And then for the e-commerce is also to follow up. Can management share with us what kind of results or achievements that you hope to obtain with the reacceleration of the investment. What are the cushion level of the loss that you would want to maintain along with your investment step-up? And then is there a specific country that will account for higher proportions of the investment spend?

Yanjun Wang, Group Chief Corporate Officer

Thank you, Alicia. Regarding the game, we believe that the efforts we've discussed on our earnings calls are yielding results over time. Our focus is on game communities, generating content tailored to them, enhancing engagement, improving user accessibility, and providing a better user experience. All these factors are helping to build demand for our content and boost user engagement. As previously mentioned, we prioritize the active user base before monetization, and typically, when we see positive trends in user numbers, we can convert that into better monetization eventually. We see this as a trend that is developing, and we hope this marks the beginning of a long-term stabilization for Free Fire, our largest game and one of the biggest games in the world. However, we remain cautious and want to continue monitoring this for a while longer. Regarding GAAP versus bookings, we believe they will begin to align generally, though there might be occasional discrepancies due to changes in recognition periods from an accounting standpoint. Overall, we expect the broader direction to remain similar. On the e-commerce side, we are focusing on user engagement and our active user base, particularly in areas such as live streaming and key categories like fashion, health and beauty, home, and living—these high-margin categories have traditionally been our core focus. We hope this leads to higher order numbers and gross merchandise value. These are some key metrics we will continue to track in line with our previous practices. Let me continue to address the previous questions regarding our profit or loss levels during these times. Overall, we aim to remain self-sufficient, and maintaining this focus has not changed. As our CEO mentioned, this principle continues to guide us, along with our commitment to improving cost efficiency over time, which we believe serves as an important competitive advantage. The fact that we can achieve profitability quickly while sustaining the size of our ecosystem and strong market leadership, and also invest in growth while many competitors are still trying to manage or facing significant losses, demonstrates the resilience and strength of our ecosystem, which will remain a crucial competitive edge for us. We strongly believe that in the long run, the competition in e-commerce is fundamentally centered on serving users at the lowest possible cost. These straightforward principles guide us. We have various ways to engage our users, and we might uncover new methods to connect with them. There are numerous service and cost points we can enhance, which are key competencies that have led us to our current strong market leadership, allowing us to serve at the lowest cost in Southeast Asia while being profitable. We are committed to maintaining and strengthening this competitive advantage. We will make decisions and investments based on what we find appropriate in the market, and while some of these investments may be substantial, our focus on execution efficiency will remain. Ultimately, everything we do is aimed at reinforcing our long-term profitability and market leadership. These are the principles we will consistently uphold moving forward.

Piyush Choudhary, Analyst

Two questions. Firstly, on e-commerce. Within Shopee Asia, can you talk a little bit about where you see better growth opportunities and where you will invest significantly more? And what is the outlook for Shopee Brazil? Can we expect more investments even in Shopee rest of the other markets and increasing losses there? Or would you aim to reach EBITDA breakeven in rest of markets first? And secondly, on gaming, can you give us some insights on the performance of Undawn post its launch? Is it trending above or below your expectation? And any update on Free Fire game in India?

Yanjun Wang, Group Chief Corporate Officer

Thank you, Piyush. Regarding Shopee Asia, we are observing growth opportunities due to favorable market conditions and resilient consumer behavior. Additionally, we are exploring new prospects, particularly in live streaming and video content-based e-commerce. The outlook for Brazil remains strong. As mentioned in the previous quarter, we view Brazil as a significant growth market for us in the long term and will continue to invest there. We are also focusing on growth efficiency. Quarter-on-quarter, we have seen improvements in EBITDA loss per order in Brazil, thanks to our ongoing efforts to enhance cost efficiency, especially in logistics. We believe this presents a long-term growth opportunity for us. In other markets outside of Asia and Brazil, they are relatively small for us at this stage and are mostly positive in terms of contribution margin. Thus, they do not require significant investment, though we will keep an eye on their progress going forward. Undawn has been launched, and typically with new game releases, we prioritize user engagement and ensuring a strong user base. Our initial focus is not on monetization, and so far, the game's performance has met our expectations. We do not have any updates on Free Fire in India at this time. Thank you.

Jiong Shao, Analyst

First, I want to clarify, when you mentioned order growth being in double digits, is that quarter-over-quarter or year-over-year? Also, could you comment on the order growth in Brazil compared to Asia? My question pertains to the take rate. I believe you mentioned that higher shipping subsidies may have affected the take rate this quarter. However, over the past few years, it seems you have maintained or increased your take rate nearly every quarter. Our rough calculations indicate that the take rate might have decreased quarter-over-quarter. Should we anticipate that the take rate is becoming more volatile going forward? How should we understand the factors contributing to potential fluctuations in the take rate in the future?

Yanjun Wang, Group Chief Corporate Officer

Thank you. Regarding order growth, we are experiencing double-digit growth compared to the previous quarter. In Brazil, the order growth is consistent with the overall group performance. As for the take rate, our core marketplace take rate is on the rise. However, the overall take rate is influenced by our value-added services due to accounting adjustments related to increased shipping subsidies. Under GAAP accounting rules, we have to offset shipping subsidies against logistics revenue at the order level, which impacts both the overall take rates and revenue growth. This may complicate some trends moving forward. Nonetheless, we believe that our sellers will continue to engage with us more on the core marketplace. We do see occasional increases in commissions, although they may not rise as quickly as before. We do not anticipate a significant jump in the take rate, but there may be a compounded effect from value-added services, which represent a substantial portion of the take rate as well.

Ranjan Sharma, Analyst

Two questions from my side. Firstly, if I just look at the core marketplace revenues, I understand this seemed to be flat as well, right, from first quarter to second quarter core marketplace revenues of around $1.2 billion. If you have higher commissions, ad revenues, and GMV, shouldn’t the marketplace revenues have gone up, if you can help explain what's behind these numbers? Secondly, if the focus of the management is shifting towards growth again, are we going to start seeing quarterly GMV being disclosed as well?

Yanjun Wang, Group Chief Corporate Officer

Yes. Looking at the core marketplace revenue, the growth rate has actually increased from the second quarter to 7.4%, compared to about 2% in the first quarter. This indicates a slight uptick in the growth of the take rates at the core marketplace level. Regarding GMV disclosure, we will continue to evaluate this on a quarterly basis. We may provide occasional updates when relevant, but no decision has been finalized at this time.

Thomas Chong, Analyst

I have a question relating to the fintech side. Can you comment about how we should think about the strategies going forward in terms of the business model as well as digital bank initiative and how we should think about the margin trend for fintech?

Yanjun Wang, Group Chief Corporate Officer

Thank you, Thomas. In terms of the fintech business, we're pleased to see that continue to produce strong cash flow and also a very strong year-on-year growth with a stable risk profile. And as we explained before, overall, we think at this stage, we try to maximize the synergies between our Shopee and SeaMoney ecosystem. And focus on building a strong platform with resilient and strong capabilities and a good service to our users. But it's still very early stage for us at a fintech level. But it's already a very good business, producing stable good cash flow. So we're happy to see how it is. We'll focus more on the health of the growth and synergies to make sure we maximize efficiency of the business at this stage.

Minju Song, Group Chief Corporate Officer

Thank you, operator, and thank you all for joining today's call. We look forward to speaking to all of you again next quarter. Thank you.

Operator, Operator

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