Braemar (LSE:BMS) — Half‐year results for the six months ended 31 August 2022

0:00 Good morning, and welcome to the BRAEMAR PLC Half Year Results Investor Presentation for the six months ended 08/31/2022. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated in the right hand corner of your screen. Just click Q and A, scroll to the bottom, type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. I hope the company review all questions submitted today and public responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Nick Stone, CFO. Good morning.

0:33 Morning. Thank you very much, Paul. First thing just to say to everybody, and thank you for joining us. James Gundy sends his apologies. He's currently in Australia. We've had a a great couple of years down there in the in the dry cargo market, and James is on a long long overdue trip to go and visit the offices there and and and meet meet and greet some of the clients employees that we've got. So Trish and myself will take you through the presentation, we'll as Paul says, we'll do our best to answer the questions at the end. Moving on then. Just just our introduction for the year. Our results, as you'll have seen, are very, very strong and significantly ahead of our original expectations.

1:25 We've had revenue and fixture volumes growing, and and we've seen profits double. We'll talk a little bit about the reasons for for the for that on the the coming slides. But success is in many ways due to the focus on our core strengths in the business. As you know, the business has been simplified. We've carried out a number of diversifications over the last couple of years and now have a very clear strategy based around the the shipbroking core of the business. And in doing that, we've we've increased our scale in this area. We've increased our global reach and some elements of diversification within this call.

2:13 In addition, we have rebranded during this period just to ensure that we we have a very clear delineation between what was before and what is now.

2:30 So trading results then. Revenue was up 46%, underlying operating profit up by by 96%. Much of the focus over the last couple of years has also been on strengthening the balance sheet, and it's very good to see that in bank terms, we had net cash at the end of the period of just under 2,000,000, and this compares to net bank debt of around 20,000,000 eighteen months previously. We're continuing to increase our transaction volumes. And although we have a a strong market in the sense of the shipping markets and and also a strong tailwind in terms of foreign exchange, our the great majority of our revenue is earned in US dollars.

3:23 And therefore, in sterling terms, we we've got some benefit from that. Nevertheless, the growth in terms of revenue in dollar terms, so stripping out the foreign exchange is 36%. So 10 out of that 46 is what what has come from the foreign exchange impact. We will also you'll see on coming slides very strong operating cash flow in the period,

3:53 and we continue to operate a a progressive dividend policy. And in fact, the dividend has doubled from the last half year from from two p to four p. So the financial summary then, just a bit more color on some of these numbers. Revenue for period, the period, 69,400,000 sterling, up 46% from the 47 the year before. Underlying operating profit, 10,900,000, up 95% from the 5.6 the the period before. And in previous years, we've had some significant differences between underlying operating profit and our reported statutory profit. You'll see that the statutory profit is 400,000 lower than the underlying operating profit.

4:47 The difference being the charge to the income statement from certain acquisition related items, including the acquisitions of Narves, which is now our corporate finance business, and BRAEMAR Atlantic, which is at the core of our securities business, and it's trading very strongly. Reported profit up by a 114% in the period. I mentioned operating cash flow in the period, 12,300,000 compared to the operating profit of 10.9, up by well over 200% from the period before where it was only 3,800,000. Dividend, we covered, doubled. And if you look at the market expectations for dividend for the full year, you you you will see that it's expected to be about 12 p for the full year. So moving to the more traditional one third, two third split between interim and and final.

5:53 Last year, the the full year comparison was was 9 p. Net bank debt, now in fact cash, 1,800,000. The the the the previous balance sheet is at 9.3 of net debt. Forward order book is another one of the KPIs we we look at very carefully. $55,500,000, which is up from 50 at the period end. And the forward order book is is revenue that we have secured in terms of contractual obligations, but not yet recognized because the revenue recognition point hasn't yet arrived. I mentioned just now that the forward order book is one of the the key performance indicators we we monitor.

6:47 You can see the others on this next chart. Revenue and revenue per head is in dollar terms, so you can see the strong growth even without the the benefits of the foreign exchange tailwind. You can see that our underlying operating profit margin is is growing is growing at the same time. The forward order book, although it it was about the same, the twelve months previously, has grown since the last year end and is moving in a in a positive direction as you can see from the chart. Now the the next one is the total leverage ratio that we measure on an annual basis. And whilst there was net cash at the end of the period through we did we do have some some seasonal debt when we pay bonuses, and the the ratio was under one half of of EBITDA.

7:49 What we had said previously is that we'd start paying a dividend again once the annual average was below one and a half times. So very comfortably below that for for the period. Well, Well, then move on, and Tris will talk a little bit about what's going on operationally in in the various desks. That's neat. So so I'm looking at the pie chart for the first half of this year. I think it would be good for you to have a little bit of color on on what the actual revenue growth has been in in these sectors and and sterling terms. And you can see the diversity of the business there on the pie chart. But I think something that that obviously is working very well with BRAEMAR is that we're still able to deliver positive revenue gains after after such a good year last year and first half of this year. So just just to break down some numbers, sale and purchase in sterling terms, we've seen a 36% increase year on year for the first half of this year.

8:58 Deep sea tankers is up over 90%. Tankers in excess of 55%. Offshore energy services up 10%. Dry cargo 61%. Security is 47%. The only sets that's lagging behind here is probably as a result of of deal deal fruition, which we expect to happen in the second half of this year, is corporate finances is down considerably.

9:27 Just just to give you a little bit of detail of what's going on within those those individual sectors, I think the sale and purchase remains very active still. We see a lot of lot of activity in the in the second hand market. There are still some big asset plays going on in ownership. I think, obviously, most recently, the last few months with the impending sanctions coming on transport of Russian oil and products, you know, we're seeing a a a repositioning of of ownership of various fleets ahead of that that change. I think we still see the secondhand market being particularly busy because the new build availability yard shortages is is is is switching that asset play into the secondhand market.

10:21 And we can we expect that to continue moving forward. Deep sea tankers rates have have gone from over a year ago being in negative territory to at the height of the start of the Russia Ukraine crisis in in the Baltic. Rates been in excess of $300,000 a day. It did normalize somewhat to below a 100,000 at some point, but I think, again, with the impending squeeze that's happening on the on on the sanctions that are gonna be imposed as of as of December 5. Again, a a real move with a lot of products and a limited supply of ships out there, which which the net result of that is is some of the rates pushing back into the $200,000 a day.

11:11 I think also of of note here aside from the the knock on effects of the Russia Ukraine crisis, US Gulf to China rates on VLCCs are back up of around around $14,500,000 a day. And and another area of of extreme activity and and high rates is is The US down to The Caribbean. Specialized tankers, LNG and LPG, again, a lot more lot long ton miles being been achieved by our desks.

11:47 Obviously, LNG in particular because of the ongoing shortage of gas. You're seeing rates that move from being down at $20,000 a day back up to an excess of $3,400,000 a day. And, I mean, again, restricted supply of of vessels means that in the short term, we're not expecting that to change. I think an interesting example of the diversity that we have in the business is our dry cargo department. If you look at last

12:17 year, it was all about capes and some of the larger vessel sizes. We saw extreme volatility in that space with rates picking up at $85,000 a day on capes to falling below $10,000 a day. We still achieved plus 60% revenue growth in dry cargo. I think that's a good reflection of the diversity that we now have from our scale compared to other brokers. I mean, Nick briefly touched on it, but, you we've been very active in in Australia and Asia on the smaller vessel sizes, particularly Handymax's, which I think, you know, you've seen a switch year on year of of last year, dry cargo, the longer runs, etcetera, from Brazil to China. We're keeping this very busy, but now, obviously, very busy in in Australia and and Asia.

13:13 Securities, we have continued growth in revenue. Our JV with GFI is nearly twenty years old. The desk still goes from strength to strength producing record revenue numbers month on month. Again, attributable to to extreme high volatility in that space.

13:37 Long longer tenure of transaction taking place. The drive of a desk that we invested in four years ago continues to grow. Bench strength is larger than that with with many new brokers coming in.

13:53 We invested in technology, which has continued to to enable us to grab market share. So even with rates falling in that dry cargo sector, our actual transaction growth is is increasing. Likewise, we've seen a real pickup in the activity for our for our physical coal business, which falls within security sector.

14:14 Again, security of supply in Europe in particular and the niche that we have in that space has meant that we've been very active on on physical delivery deliveries into ARA, which which has been good. So so forward,

14:33 we generally expect the the the the activity that we have in in tankers, s and p, dry cargo, securities, all of our departments really to to continue in the foreseeable future. I I think think that's just a result of a number of factors in that the shipping market seems to be in a period of flux in that post COVID, Russia, Ukraine.

15:00 We are seeing a a a a redraw of the the great global trade routes shipping is using. We're being forced to to to have more active spot markets and and more thought to try and secure supply moving forward. I think that that pre COVID,

15:21 you know, across a a lot of the different sectors that we're dealing, we had what I would call virtual pipelines existed where, you know, chips were on long term charter, and it was very hard to sort of to break into that space and for there to be such a necessity for spot transaction. I think, you know, given the the changes that we have seen post COVID in Russia, Ukraine, that that generally we're seeing people having to find different ways of moving products around, which means that there's a rejoicing position in in in many different sectors, and we expect to see that continue. I think move moving further ahead as as of 2024, we're gonna see shipping fall into the EU ETS.

16:06 And I think we'll see continued

16:10 continued regulation come into our space. Really has has had a bit of a pushback on on which direction it wants to change to to to take in so far as new orders on on choosing the propulsion systems that they want to use. So I think if if in the next year or two, we could perhaps see some normalizing as a result. Hopefully, you know, Russia, Ukraine perhaps coming to an end and or COVID, post COVID,

16:41 that things normalize somewhat. I think shipping has an impending cliff edge and that the regulatory changes from environmental pressure are gonna are gonna force change on the on the supply of of of of of what we transport products around them. Just just briefly touching on securities. You know, we have invested heavily in dry cargo in the past number of years. I'm sure sure some of you have seen that most recently, we've we've divested a little bit into natural gas. We had the opportunity to to take a team of 10 brokers, which very much fits with our profile of of seeing the synergies from products that we're transporting and the overlap and ability for us to to diversify somewhat into the underlying products that we're actually, you know, carrying on the ships that we're charging for people.

17:41 Natgas is a very obvious obvious product for us to get involved in. We saw the synergies between coal and dry FFA and our dry cargo department. And it's certainly in the setup of the Natgas desk, already seeing the synergies between between that and our LNG chartering desk, which, you know, as you can see that we've we've increased revenue as a total of of overall revenue from 3% in 1819 to 12% in 2223, which I think we'll be able to return single digit single digit growth over the next few years for sure. Maybe not double digit, but, you know, it depends on on what what other products we can get involved in.

18:28 So opportunities for growth. I think we we the most most obvious areas that we have grown and continue to to to see opportunity for in Europe. We opened an office in Geneva three years ago. I mean, the addition of that clean tanker business in Geneva has certainly contributed massively to the tanker revenues that we've just been talking about. Since opening the office, we've been able to put more people from dry cargo into that space. We're now gonna move some people from sale and purchasing to to that area. We're also looking at the opportunities that we may have to transfer some of our derivative business to to Geneva.

19:22 We've also opened an office in Athens, which initially was an outpost of sale and purchase. We've since diversified into containers and dry cargo. I think these are all sort of showing that once we once we move a team into a new new geographical area, generally, we have a follow through from other sectors that weren't obviously going to be there. Seeing an opportunity based on the clients that that are in that space at the moment. I think another good example of this is in The Middle East, which so initially, post COVID, there's a bit of a shift from The Middle East to to Singapore.

20:08 I think we're now seeing possibly as a result of the Russia Ukraine Crisis that have moved back to The Middle East. A lot of our competitors and our customers are certainly increasing the number of personnel that they have in Dubai and other areas in The Middle East. That's probably as a result of the the repositioning of ownership that we were talking about earlier as a result of Russia and Ukraine, and also the general perception that any new refining capacity that's gonna come to the market in the next three to five years. A considerable portion of that will come from The Middle East. So it's seen as a real area of growth, which obviously we look to capitalize on.

20:58 A real another sort of opportunity for us moving forward is in North America. I briefly touched earlier on on how busy The US Gulf and and, you know, whether that's US Gulf to China and or US golf down to The Caribbean. Very busy space at the moment on on all all vessel sizes. We have been able to successfully establish a team of of of specialized brokers in Houston. It's very much an area that we wanna focus on and continue to grow. We're we're actively speaking to people, and, you know, we hope year to to formalize some partnerships and or acquisitions that will enable us to to grow that business in North America.

21:48 So I think in summary, moving forward, we still still see huge opportunities in all of the sectors that we're dealing. I think that we've reached the size where we have that scale. So we're talking about earlier in the dry cargo market. We still you if know, one sector was very good for us a year ago on the large vessel sizes because of that diversity now, you know, we're able to have substantial uses of revenue from other sectors in the dry cargo. We do foresee rates in most of the sectors that we deal in remaining high over the next twelve to twenty four months. We briefly talked about the the remapping of routes. And and certainly with the complicated sanction structure that we're gonna have to navigate over the next few months, we see that as a positive for our business.

22:42 Again, a knock on effect is the growth in ton miles, which haven't really sort of touched on that too much so far, but I mentioned environmental changes and the confusion over likely fuel for propulsion. I think the general perception is that in the short term, we will see slow steaming, and that's something which could be beneficial to to us as brokers with vessels on time charter. New build capacity, we touched on still very, very low with with minimal shipyard capacity for new builds up until 2025. That's not changing. And again, ESG is is is will be forcing chains on on shipping moving forward.

23:33 So then thanks, Tris. What what does this mean for for the outlook for for BRAEMAR? Clearly, the story that that that that that you've heard and the messages we're trying to give, the current year is is looking very positive for us. And we we expect that trading will continue to exceed our original expectations for the year. We've during this period, we've invested in more internal resources, some some in support infrastructure as well as bringing in new brokers and new teams because we recognize that if if BRAEMAR is to grow over the the coming years, we need to make sure that the the the team is is fit for purpose for that growth.

24:24 We've made no secret of our target to double the underlying operating profit of the business. That was first put out there in in October 21, so just over a year ago. And what that looks like is underlying operating profit of 18,000,000. Now if you've seen the forecasts for the business for the current year, and they are available on our website from the forecast from from Sendcost and from Edison, you'll you'll see that they actually are forecasting more like 20,000,000 for the current year. But from our point of view, we we we do have a strong benefit of the foreign exchange impact on current year's results. Estimated that at around £5,000,000 of the profit.

25:14 And therefore, when looking at this from a like for like basis, we we would measure ourselves assuming assuming that's what we deliver at around 15,000,000 rather than 20. So 15,000,000 compared to the target of of 18 over a four year period is obviously still very strong progress. But we we as I say, we're looking to do this on a like for like basis and therefore won't quite have achieved our goal yet. Free of bank debt for for the moment. I mean, Chris Tris has talked about our ambitions to grow, and you you might also have seen in our statement that we've renewed our banking facilities with HSBC.

26:03 HSBC have been very supportive over the recent years, particularly through COVID, and we're very pleased to have been able to renew our facilities, which does give us the ability to spend some cash on bringing new teams or small acquisitions in. So it doesn't necessarily mean we'll be free of bank debt over the over the coming years, but we're clearly gonna manage it very carefully and and make sure it it it never goes to the the the sort of leverage ratios that we had two or three years ago. We are, as we said, continuing to achieve fixture volume growth. So, yes, the markets are strong. The foreign exchange is supportive, but we're also growing volumes of business we do underlying that.

26:53 Our new brands, and and you may have seen that BRAEMAR Shipping Services PLC has now become BRAEMAR PLC, which sort of reinforces the the the change of the strategy and the and the focus on the core. In terms of, therefore, where where where the business is looking looking at, we continue to to grow the team. We have a very experienced team. James James isn't here with us, but if you've heard him in these presentations before, who has been a leading ship broker for many years and is leading the team by example and continuing to broke and and is very supportive of bringing in additional broking resources.

27:45 Our sectorial diversification within ship broking, and you can see from Tris told you earlier, pretty much all the markets have grown across the last the last six months, and and therefore, we we are in a particularly strong position. But the diversification across those markets will will help when inevitably one or two of them might have a sort of downturn in terms of performance. Our our performance, therefore, through the business cycle will benefit from that diversification, and our stronger balance sheet will will enable further growth and potentially some m and a as we go forward.

28:37 There are some other slides in in in the in the appendix. If you look at our website, we we publish some some data data on the shipping markets. We don't necessarily plan to go through those, but are now, therefore, ready to take your questions. Fantastic. Thank you very much indeed for the presentation. Ladies and gentlemen, please continue to submit your questions just using the Q and A tab situated in the right hand corner of your screen. But just while the team take a few moments to read those questions submitted today, I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Nick, Trish, as you can see, we've had a number of questions come through from investors today. If I may, just ask you just to click on that Q and A, Sam, where appropriate to do so. Just read out the question and give you a response, and I'll pick up from you at the end.

29:24 Thank you. K. Well, that I've I've got them to to my right here. So the the first the first one is around use of cash, which I will answer. The second one is is around how technology is impacting the business, which I'll then encourage Tris to answer afterwards. So the the the question around use of cash is our strategy for for more deals. And I and by that, I I assume sort of m and a or or team team deals or distributions. And I think what what we do plan to do is is to do a bit of both. We touched on earlier that we we will keep our dividend moving forward. I think if you look at the if you look at the expectations for next year within the analyst forecast, you'll see that there's a a roughly three times cover between our earnings and our dividend, and I think that's something you you might therefore expect to see maintained going forward.

30:27 But clearly, we the business does generate significant cash when everything is going well. And and therefore, we're in a strong position to be able to use that to to bring teams in. Chris has mentioned one that we've already achieved, and and there are others that we are looking at as well as sort small of bolt on m and a deals. So the the this is, as I hope is clear, a growth story, but one that is supported by a sensible dividend strategy at the same time. Trust, the next one was how is technology investment impacting the business? Yeah. So I think for us, specifically as a company, we we we have a, obviously, a different approach to Clarksons.

31:20 Clarksons operate to some extent as a technology business within a ship broker. They're trying to they have successfully grown new revenue streams by providing software to the the shipping market. That's not something that we want to do. We try to form strategic partnerships with with other businesses, other technology providers. We don't see us as being a creator of technology. And I think sort of a good example of that is is obviously we, you know, formed a partnership with Zoom Technologies who were were able able to to deliver a successful trading and data platform for our dry cargo team, which certainly, you know, reaped benefits and and and been been a a successful partnership to date and will continue to be. So I think with the rest of our chartering desks, we we look to find solutions that will improve their workflow and basically just keep them at at the the head of the pack insofar as the value added that they can they have as brokers and that we're not getting left behind by by other tech technology disruptors in our space.

32:52 I I don't think we we see technology at the moment as as a as a potential threat to the way that we execute business. But I think, obviously, with the with the huge thirty year plus of transactional data that we have, you know, BRAEMAR is in a very good position to to provide that value added. It's just having the right platform to to for our brokers to to access it and and and making sure that, you know, the the other technology challenges out there, you know, are not going to and and and not gonna have that that that edge that we have from from that kind of transaction data. But, you know, it's it's not something that we're you know, we don't have huge budgets to spend on technology.

33:40 It's it's very much you know, we we look we look to enhance our business rather than diversify into becoming a technology business. The next question is around speeding up our growth opportunities. And how I'm interpreting it is, are we constrained by by people or capital? I'll I'll I'll give my my thoughts first and then let I mean, I I this business is all around people. And in order to grow the business in in a way that we are setting our stall out to do, which is new teams, bolt on acquisitions, It it's more about finding the right people and the right acquisitions than needing significant additional capital.

34:35 And I and I think that's also reinforced by Trish's answer to the last question around technology investment. Yeah. And I think just just sort of adding to what Nick's saying, I think, you know, when we're when we're looking at at at acquisitions, we we we work to a a fairly tight formula of what we're comfortable with. And we certainly, you know, would would only we only look to acquire or or whether it's businesses or or teams that are gonna that have a direct impact on the on our bottom line from from, you know, minute of completion. Next question is, will BRAEMAR be affected by the Russian sanctions, and how will the sanctions alter the spot freight market in 2023?

35:27 I think part of part of the message we've been giving over this last period is that the the sanctions have have increased the the ton miles in the in the market in in a number of sectors, and increased the demand and reduced the supply of of available available ships. So it clearly had is at the moment having a benefit beneficial impact. The spot freight market in 2023, I I guess it rather depends what happens. Yeah. I mean, I I I think that it's it's a very difficult area to navigate, you know, what what the actual impact will be when the sanctions obviously take their their new toll in December 5 and and then later on in February.

36:24 But I but I think, you know, it it's we're always reluctant to say that, you know, we we we can benefit from a very unfortunate situation where it would seem that this remap of of how oil and product is moving as a result of of the Russia Ukraine crisis is having generally a positive effect for share brokers in the as as I mentioned earlier, spot market activity and and and time charter has has increased. I think probably as a result of of of what would have been fairly locked locked routes and suppliers having to to change the way they go about doing their business, which ultimately means that they need to use brokers.

37:16 Next one is a slightly harder question to answer in some ways. How how do we see how we distinguish from Clarkson? So so I I sorry, Nick. I Yeah. No. Please. I was just I I saw that one earlier, so I kinda prepared for it. I mean, I I think, obviously, the the the most notable difference is the is the the size. Clarksons are roughly three times the size of us on on pretty much every metric that you look at, you know, whether it's revenue, profitability, number of brokers, etcetera. I think we see that as a positive in that, you you know, know, BRAEMAR's kind of in in a bit of a a sweet spot for growth at the moment, and it it it's certainly given us some momentum that we haven't reached the scale where it's quite difficult to to to know yet how much bigger we can get or where we really are. We we identify quite easy areas that we can be bigger and we can have more brokers.

38:21 And I think that that gives us a little bit of an edge over Clarksons and that, you Clarksons know, are of such a size that they have that scale, have that revenue. It it it's quite hard when you're sort of top of the league to stay there. I think sometimes it's good to be the chasing party, and it certainly feels that way for us. I think we we just just have that little bit of agility that perhaps they don't have, and we're small enough that we can make very quick decisions about what we wanna do with the business. Next question is around the impending global recession and also the the the the continuing China zero COVID policy and how that will will impact our business. We're not but perhaps just say first, we're a in any in any any scale, a container broker. And and perhaps the most obvious impact on both from both of those factors is on the container market where we've seen values and and and and volumes drop off.

39:34 And and therefore, the that in in in that sense, we are less exposed than if we were a significant container broker. And and I think Tris was mentioning earlier that, you know, even with an element of stability in the shipping market and perhaps less demand, less geopolitical factors. The the the shipping fleet is aging, and the ESG pressures are gonna continue to grow on on the industry, which, you know, we we think, rightly or wrongly, means that the the demand for shipping is not likely to reduce in the short term.

40:20 I mean, I I I completely agree with Nick in that I think to date, the recession has had little impact on volume, possibly quite the opposite. And I I think think that as Nick said, you know, the the the impending fleet shrinkage and and huge environmental pressures that are gonna come into the shipping market, you know, that in in comparison with with increased demand should should should remain mean that things remain buoyant over the next couple of years irrespective of of what's happening with China and and global recession, etcetera. That's fantastic. I think you've covered off all the all the questions there. So thank you very much indeed. Of course, are any further questions that do come through, the team will be able to review those and we'll publish responses where appropriate to do so on the Investor Meet company platform.

41:15 Nick, perhaps just before redirecting investors to give you their feedback, which I know is particularly important to you and the team, if I could just ask you just for a few closing comments, that'd be fantastic. Yeah. Well, just thank you again for for for coming in and and listening to to the update. You know, the the summary from from our point of view is that, you know, things are very positive for BRAEMAR at the moment in terms of the way that the business has been re re reordered and focused in in markets which are actually very positive at the moment. So we feel like we're in a good place. Got plenty of opportunities in in the market to to capitalize on and continue to to build the growth story.

42:02 Yeah. No. I think we're the the the investments that we've made in in people technology and and and and and the new offices are definitely delivering growth for us. I think we have a diversified business model that that means we're able to to be profitable at all points in the cycle. We We are are increasing market share. And and and and, yeah, I think we're we're very well positioned moving forward. Fantastic. Nick, Trish, thanks again for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected to provide your feedback, and all of the team can better understand your views and expectations. This will only take a few moments to complete, and I know it's greatly valued by the company. On behalf of the management team at BRAEMAR PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you