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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, ladies and gentlemen. This is Raimundo Fernández-Cuesta. Welcome to ACCIONA First Quarter Results presentation for the year 2020. Presenting today will be our Chairman and CEO, José Manuel Entrecanales; and also our group CFO, José Angel Tejero. José Manuel?
Thank you, Raimundo. Good morning to all. This is José Manuel Entrecanales. As you have seen in the first two quarter presentation released last night, we have had a reasonable set of results in the first quarter. Although obviously these results do not reflect the core of the impact of the crisis, which in all likelihood will be felt mainly from mid-March onwards.
Needless to say that, we do not know the length or the time or the depth of the crisis, and hence, it is impossible to accurately estimate its consequences in our P&L and our balance sheet.
In this circumstances, it is obvious that our recent guidance for the year is no longer valid. And any outlook, which I will share with you nonetheless, must be taking -- must be taken as highly provisional and entirely subject to future developments of the pandemic and its political, legal and social consequences.
I believe, however, that we're in a relatively good situation with a strong balance sheet, a resilient P&L and a unique business model. One that is good for favorable winds, but it's also necessary if not more for dire times as the ones we're living in.
But before getting into more detail, I would like to stress that our main goals are and will be: first to protect the wider ACCIONA community; and second to preserve our ability to continue investing, growing and delivering value to all stakeholders, in particular our people and our shareholders and society in general.
As regards our people, we were fast in identifying the first isolated cases within our staff in Spain, swiftly proceeding to quarantining entire teams, implementing remote working, providing tests and specialized medical attention to thousands of employees or ensuring everyone in the company with a significant financial aid, should they have to be hospitalized.
The direct incidence of the virus within ACCIONA has been limited to 1%, who are or have been symptomatically sick. Approximately 11 of the close to 5,000 staff tested have developed antibodies, and around 2.5% are carriers without any symptoms and are being quarantined until they test negative. Most unfortunately, we have had to lament two deceased employees.
We are now preparing to resume normality in Spain and in most of the world with accurate health protocols and sanitary kits and facilities, mainly focusing on identifying asymptomatic cases, maximizing distance, constant disinfection of workplaces, flexible access to office, personalized food provision while in premises, providing alternative to public transport or developing applications for maximum safety.
We have also stepped up our social contribution initiatives, helping our SME clients in financial difficulty; working with health authorities to strengthen our service provision and support in hospitals, particularly those we manage; cooperating to set up of temporary hospitals; donating thousands of health kits or logistic and facility management support to public administrations.
As always in ACCIONA, our overriding objective is to ensure that no temporary situation impairs our capacity to continue contributing to all our stakeholders through our medium- and long-term goal. But despite its enormous challenges, we see the economic policy response to the current crisis as an opportunity to accelerate investment in sustainable infrastructure to help the recovery and economic regeneration in the aftermath of the coronavirus and we want to be in a position to capture these opportunities.
For these purposes, it is imperative to maintain a dual strategy, consisting in maintaining very prudent levels of liquidity and solvency in order to be prepared for a possible slow recovery while also being in a position to take advantage of new investment opportunities should the rebound be fast and V-shaped.
Along these strategic objectives, we have increased our credit lines by more than €850 million during March and April. We have obtained an investment-grade rating from DBRS. We have agreed to delay payments of a significant portion of our 2020 CapEx. And we will propose a 50% reduction of the dividend distribution intended before the pandemic.
On an operational side, we have put in place a program to cut operating costs significantly and prepared a wide mature cash generation asset disposal program to modulate proceeds from disposals as may be required to maintain our gearing within prudent levels.
Briefly going over our activities in energy, the most relevant cause of impact in the first quarter has been the collapse of electricity prices in the Spanish market. Output in Spain in the quarter was slightly better than the previous year but with an improvement in hydro production, offsetting weak wind volumes.
Production in the international generation fleet before taking into account new capacity was flat relative to last year. Our new capacity additions were only marginally affected and we expect to maintain our development plans for the year and all other factors remaining equal over the coming years.
As a matter of fact, there is even a chance that we may be able to improve our outlook for 2021 onwards as new development opportunities from less solvent players may arise. Along these lines, KKR's recent agreement with AXA to jointly with us acquire its 33% stake in ACCIONA Energía Internacional may prove to be a good source of capital for further renewable energy development.
There is obviously no firm obligation from either part but there certainly is a good fit between our core competencies and interests. We will try to build upon them naturally without giving up on our flexibility and our independence.
We also see new opportunities arising from public drive to kick-start economy recovery through investments in renewables and other sustainable infrastructure. It is basic logic that if we're going to have to replace a big portion of our energy matrix in the coming years, we might as well start now and cover both the necessary stimulus and the undelayable infrastructure upgrades.
This is particularly true for electricity generation but it is also applicable to energy efficiency to electricity transport and distribution urban and mass transport infrastructures electric and shared transport and a long list of long due changes in the means and habits of modern society.
As regards our non-energy infrastructure division, coronavirus impact has been somewhat deeper and varies within regions. We are however seeing reasonable swift return to relative normality and even in highly affected countries like in Spain in general things are turning to normality quickly. The most affected region is Latin America where some key jobs still remain at a standstill. Again here, there is general public consensus that much needed social transport waste or water infrastructure are the most efficient means to quickly restore economic activity. And here PPPs will have to play an important role in overcoming public budget constraints.
Fortunately, however our construction and concession backlog is strong -- strong enough to withstand the temporary standstill of new project awards should this happen. As for our other businesses, very mixed impact, but nothing dramatic in any area, particularly we remain confident that the temporary effect of the virus will be limited to a few months as is now our view. Liquidity-wise, we are fine with $4.1 billion in lines and cash equivalent assets. Just in case as a contingency plan, we are ready to quickly make liquid mature assets for which demand remains strong.
As for operational matters like everyone else, we have quickly and flawlessly adapted to homeworking with physical presence wherever necessary, which we believe in the medium-term will become standard brings significant savings added efficiencies and often better quality of life to the organization. We have decided that it was an appropriate moment to align our asset amortization policies with market practices. And most importantly, our own technical view on the reality of our assets -- of our assets' life goes beyond the new 30-year depreciation horizon.
All in all, we see the bottle half full. If the crisis evolves as we see it now i.e. quickly receding over the next few months, it may prove an opportunity for more business, faster growth in energy and non-energy infrastructure and better work habits. Needless to say, the bottle could also be half empty in which case we have a strong contingency plan and are very confident about our capacity to weather an even longer and nastier storm.
At this stage as difficult as it may be to make any solid prediction, my best judgment is that we will finish the year around the mid-teens below last year in EBITDA, mid-fours in net debt-to-EBITDA ratio and about 30% below in CapEx disbursements, but not -- but close to plan in actual execution. Thank you very much. Good luck and stay safe.
Thank you, José Manuel. Following José Manuel's introduction, we have included for your reference in more detail about preliminary implications of the pandemic in our two main businesses of energy and infrastructure. With respect to energy, let me first mention that the operation of the asset fleet is according to plan with very good performance in terms of availability and safety indexes.
José Manuel highlighted already that the main implication of the COVID is a steep decline in power prices in Spain, which will be partly mitigated by the regulatory banding mechanism on our hedging of unregulated volumes. The decline in average Spanish power prices to the mid or low-30s together with a €50 million lower regulatory income could have an impact of EBITDA of around €80 million to €95 million in 2020 relative to previous year. On the other hand, we have incremental EBITDA from new capacity and volumes from existing capacity should in principle be a bit higher than last year. New capacity should contribute incremental EBITDA of around €60 million this year.
In terms of growth, there's little disruption and we are positive about our medium term plans and the scope for more opportunities to arise. In particular, we continue to make good progress with respect to our largest medium-term developments of the Tenaska solar pipeline in the U.S. with high visibility for at least 1.6 gigawatt for the period up to 2024 and MacIntyre in partnership with Queensland government, which is one of the largest wind farm in the world with approx of one giga of total capacity. This is in addition to the 1.1 gigawatt of facilities currently under construction or about to start with commissioning dates in years 2020 and 2021.
Tolpan wind farm in Chile has been fully installed in the first quarter. Two wind farms in Mexico, Santa Cruz, and San Carlos; one in Australia Mortlake; one in the U.S. Chalupa; and one solar PV plant in Chile Usya are under construction and another 226-megawatt in solar PV will start construction this year in Chile.
These short-term projects under construction together with Tenaska and MacIntyre would cover for approximately 70% of our five gigawatt total growth targets for the period 2024. In the private PPA market appetite remains strong and we continue to make good progress with our current PPA pipeline.
Moving on to the infrastructure business, this is where we envisage the largest financial impact in absolute and relative terms. But also this is where it is more difficult to predict given the different ways local governments authorities and clients have reacted to the pandemic.
We expect construction and services to be the most impacted and envisage limited impact in concessions and water. Infrastructure is generally seen as an essential activity and as a key driver for economic recovery. Tendering activity remains strong and we are contracting according to plan.
Having said that, in construction the small delays in what we call Win and Do projects during this year may translate in lower revenues in 2020. Suspension of work has been limited and out of 461 construction projects, roughly 426 are up and running.
Nevertheless, the majority of sites experienced some temporary incidents due to more restricted labor mobility and health and safety practices. All-in-all, this could translate into a decline in production that in aggregate would equivalent to several months of revenues somewhere in the range of €600 million to €800 million.
In slide 10, we have included a detailed overview of the implications of the pandemic per region. As José Manuel mentioned, LatAm remains the most affected region with respect to the suspension of works. On most other regions, the picture is much more optimistic at the moment relative to where we were a few weeks ago.
Following the update on the COVID situation, let me start with a review of the first quarter results. On slide 12, we present the key highlights. The first message is that Q1 results starts to show some signs of the impact of the pandemic which we quantify in €24 million of lower EBITDA.
The early impact of the pandemic affects mainly to the Spanish energy business and to a lesser extent the services activity to road concessions in Spain with exposure to traffic and Bestinver. As of the end of March, construction was still relatively unaffected.
In Q1, we have reported flat EBITDA relative to the same period last year despite $24 million impact of the COVID. The key operating trends are low Spanish power prices and the reduction in our regulatory income in Spain as a result of the periodic adjustment related to the past and future power prices. This is partly offset amongst other elements by the contribution of new capacity and marginally better overall output.
In infrastructures, EBITDA is down due to the fact that in Q1 last year we still had a material contribution to profit from Quito Metro contract, Mexico Airport, and the contribution of ATLL in the first quarter. And some other minor contracts that were in their final stages.
There are two changes in reporting. One is a presentation about the EBITDA line of income from equity accounted investments that fit within the group's main activities, such as renewal, concessions, construction. This is a proxy of how the rating agencies look at operating profits. The EBITDA figures for last year are presented in a consistent manner to help comparability.
In addition, as already mentioned from the 1st of January this year, we will depreciate the remaining book value of wind and solar PV assets over 30 years rather than 25 years. In terms of investing for growth, we have not stopped making progress towards achieving our growth targets and aspirations. Total investment is at similar levels than last year, but much more concentrated in the energy division.
Moving to slide 13, we present the key figures. Revenues were down by 5.1% due to lower revenue -- energy revenues. Infrastructure reported flat revenues. EBITDA reached €325 million in line with the EBITDA generated in the same period of 2019. Energy grew its EBITDA by 2%, while infrastructure fell by 26%.
EBITDA of other activities improved, thanks to the real estate offsetting lower contribution from Bestinver. Earnings before tax are up 8.4%, reaching €128 million. I noted earlier that high accounting life of our wind and PV assets, which has translated in €21 million lower depreciation charges.
As a result of the higher useful life, we have accounted for a partial reversal of the loss recorded in 2013, following the regulatory reform in Spain, resulting in positive effect of €87 million as you can see in the impairment line of the P&L. Net income increased by almost 7% to €78 million.
Total investment amounted to €322 million, and that is the main driver for the increase in net debt during the quarter from €5.3 billion at the end of 2019 to €5.6 billion at the end of March 2020.
In the slide 14, we provide the breakdown of CapEx during the quarter by division. The vast majority of the investment cash outflow during this quarter is related to the construction of new energy capacity in Mexico, U.S. and Chile.
Investment in the infrastructure division amounted to €38 million, reflecting mainly the purchase of equipment in construction and in the case of services in the area of mobility.
The investment in real estate inventories during the first quarter amounted to €6 million relative to €133 million the previous year, which included the Mesena project acquisition. I look forward to the year we see a sharp reduction in the investment cash out as proper arrangement has already been taken in order to reduce it.
In the slide 15, we show the drivers for the evolution of the net debt from December to March 2020. The increase in net debt is driven by investment during the period. Working capital reflects the usual first quarter seasonality, but also the effect of the regulatory banding mechanism in Spain due to the lower power prices. Working capital cash outflow amounted to €224 million improving the €289 million figure in Q1 2019. €119 million corresponds to the infra business.
Moving to the slide 16, you can find detail on the net debt position and its key metrics. With no major changes in the infrastructure -- in the structure of our funding, other than the cancellation of €708 million deposit that we had as of December 2019 related to the Nordex offer, deciding increase both the cash balance and the corporate debt with a neutral net impact.
The deposit was a requirement under the German takeover rules, and it was canceled on January 10. Our average cost of debt has continued to show improvement during the quarter, relative to the average during 2019 financial year, and we have increased slightly our average debt maturity.
In the slide 17, we focus on the current liquidity position. We saw the most recent month-end figures, as of April 30, with total liquidity standing at close to €4.1 billion, which is one of the highest in recent years more than three times the debt maturities for the rest of the year of €1.3 billion in total.
This very comfortable liquidity position reflects our incremental liquidity initiatives implemented since the early stages of the pandemic in mid-March. These actions were aimed at absorbing the entire outstanding commercial paper of ACCIONA in the unlikely event of not being able to renew any of it without having to reduce our normal levels of undrawn facilities.
The main initiative was arranging 852 [ph] new facilities from our supportive pool of relationship banks. In the meantime and despite the market disruption caused by the COVID pandemic, we have continued to renew our usual bilateral credit lines and loans and extended during the crisis our two largest syndicated facilities to five years from maturity 2024 to 2025 as we do every year in more normal circumstances.
We have made public our DBRS investment-grade rating to make us eligible for European Central Bank debt purchase programs and improve our access to credit markets in a more advantageous terms in this more volatile environment.
Starting with the review of the operating performance of our businesses. In slide 18, we present the Energy division. EBITDA grew by 2.1% to €244 million with a COVID impact of €15 million. The Spanish generation fleet reported 6.8% lower EBITDA due to the business being affected by the lower power price environment exacerbated by the COVID.
Firstly by reducing gas demand in China, which fed into further pressure in already oversupplied gas markets. The Spanish lockdown has had a very deep temporary impact on -- in demand, which has fallen by more than 20% relative to the first week of March, right before the lockdown.
And the worst time, the week beginning of the 6th of April, demand was 26% lower recovering by 7% as the stricter phase of the lockdown was lifted. Commodity prices have also been responding in May as we pass the peak of the pandemic. The average Spanish price during the quarter was €34.9 megawatt hour, down 37% from the previous year.
The impact on EBITDA has been partly mitigated by the regulatory banding mechanism, which establishes a floor for this year at €48 megawatt-hour. And our hedging of parts of our volumes production in Spain improved by 2%, thanks to a better hydro output but wind was weak. And we are still below normal year expected production.
The average power price for the year 2020 is expected to be at around €33 megawatt-hour on the basis of real prices to date and forwards. And our estimates suggest a slightly higher price. These are in any case some of the lowest prices in the history of the Spanish wholesale market.
In terms of hedging, for 2020 as a whole, we have sold two terawatts-hour at a price of close of €50 a megawatt-hour. And for the remaining quarters of the year, the hedge position is 1.6 terawatt hour at €48 megawatt-hour. The periodic regulatory update approved earlier this year will detract approximately €50 million of annual regulatory revenues for the next three years relative to the previous period. In Q1, this meant €10 million lower EBITDA.
With respect to the international business, its EBITDA grew by 3.4% thanks to new capacity in operation, which increased by 554 megawatts during the last 12 months and contributed €12 million of incremental EBITDA during the quarter. The new capacity, although there may be some small delays in new commissioning this year should contribute incremental EBITDA of around €60 million this year.
Moving to the review of the infrastructure division, revenues were relatively flat at €1.1 billion with lower construction revenues offset by revenues in the water that almost doubled its production compared to last year.
As commented earlier during Q1, construction was not yet affected by the pandemic. Its EBITDA fell from €47 million to €25 million. As in the first quarters of last year, we still had a significant contribution from Quito Metro Mexico Airport and Atacama Power Plant. The water business EBITDA increased by 21% from €15 million last year to €18 million in this first quarter. The €15 million EBITDA in the first quarter of last year included €11 million of contribution from ATLL. So the underlying growth driven mainly by desalination projects in the Middle East is of €15 million year-on-year.
The concessions EBITDA is flat, despite the negative impact of a small asset disposal and the COVID impact on two roads concessions in Spain that are exposed to traffic volumes. EBITDA in the services activity fell by 37% being one of the businesses of ACCIONA most affected by the early spread of the pandemic as discussed.
Our total backlog has grown during the quarter and stands at very healthy levels of €11.6 billion, out of which €8 billion corresponds to EPC projects giving our infrastructure business excellent revenue visibility post-COVID.
To conclude the review of operations, the property development business reported €10 million EBITDA in the quarter, which represents improvement of €16 million driven mainly by the delivery of 130 units during the quarter. Total estimated gross asset value dominated by development assets with marginal commercial properties stands at almost €1.1 billion, with substantial future EBITDA embedded in this investment.
Bestinver EBITDA fell by 18% to €12 million, reflecting for the most part of the COVID impact on average funds under management. And finally, I would like to elaborate on the indications provided by our Chairman on how 2020 financial years may turn out to be. With all the caveats, he stressed about the complexity of the situation. This highly provisional expectation may well change for the better or for worse as the global health situation evolves. Our current basis scenario is that the impact of the pandemic will be concentrated in the second quarter and is followed by a gradual recovery in Q3 and Q4.
At the EBITDA level we currently envisage a drop in the range of plus/minus 15% relative to 2019 as working as scenario. In terms of net debt-to-EBITDA ratio, we expect to temporarily be exceed our stated financial policy of below four times and our priority is to contain this exceptional increase to levels below 4.5%. We remain committed to returning during 2021 to levels consistent with our financial policy, as the recovery of the economic environment takes place.
And thank you for your attention. And now we would like to start the Q&A session.
Thank you José Angel. Just to remind participants to identify themselves and their institution. And please speak clearly and stick to two questions per turn. We’re happy for you to come back with further questions later on, but we will appreciate two questions only per turn. Thank you.
[Operator Instructions] The first question comes from Oscar Nájar from Santander. Oscar, your line is now open.
Hi. Thank you. This is Oscar Nájar, Santander. Thank you for the call, very clear and detailed. I'd like to ask two questions. The first one is for the new target of EBITDA minus 15% for this year. One clarification, is this already including the €100 million cost cutting program? So it should be like €200 million net decrease including this cost cutting program.
And if you could give us more details on the construction, I think you said something about €600 million to €800 million of revenues that could be affected. So that amount of the revenues you are expecting to be lower versus 2019?
And the second question is regarding the leverage. Now you said you are targeting like 4.5 times and trying to be even lower than that. There is any covenants that could be affected at some level? And if so which is the level? Thank you.
For the first question, the answer is yes, it includes. The second question was in relation to the revenues on the infrastructure, no. The -- I mean, it's not in relation to last year. I mean it has to do with our expectation in respect to our budget for this year. On the leverage, I mean, we are not concerned about breaching any covenants.
Next will be Fernando Garcia from RBC. Fernando, you line is now open.
Hi. Good morning, everybody. I am thanking for taking my questions. Again, on clarification on the 2019 EBITDA. This includes the €80 million equity account results? I wanted to clarify that. Second question is regarding this 1 gigawatt run rate. When do you expect of new installations -- when do you expect to reach that level of installations? And taking into account this new maybe net debt-to-EBITDA target of no more than 4.5 times? In the scenario that we are going to have some cash outflows on CapEx of €500 million probably next year. Is this going to be the main target and you are going to adjust your investment based on that? Thank you very much.
Yes. The first question is, yes. But for comparison purposes, the last year is restated. So it is, yes. Now in respect to our growth rate of 5 gigawatts as I stated in the presentation we maintained our growth rate. 70% of our target are already on identified projects. And on the financial ratios again I -- as I said although this new target or this -- the expectation for this year is not a new target. We expect to come back to ratios around 4 times net debt-to-EBITDA next year.
The next question is from Manuel Palomo from BNP Paribas. Manuel, your line is now open.
Hello. Good morning, everyone. I'm sorry to insist on the full year 2020 target, but I think that I had some technical issues. So when you say 2019 reported figures this 1,357 million EBITDA, what you're referring to? If not could you tell us what is the reference what is the figure? That's the number one question.
Second one is a bit of forward looking. It's looking beyond 2020. My understanding is that for the year 2019 you've got a significant amount of energy that has been already hedged. So my question is looking at the decline in COVID prices and where they are today where the forwards are what is your strategy? Or what is your -- I mean better outlook for the energy division and the strategy in terms of hedging beyond 2020? Thank you very much
In respect to EBITDA of reference for the 15% decline is 1.437. So the EBITDA is restated. In respect to the hedging policy, I mean, it remains to – the same. Our international fleet, we have a strong demand for private PPAs and we do the hedging through that mechanism for the Spanish market. I mean, we have the regulatory banding. We have the financial hedges. And also we have what we see in Spain is a strong new interest on longer-terms PPA private PPAs so forth.
Next question, please.
The next question comes from Mikel Zabala from Bank of America. Mikel your line is now open.
Yeah. So two questions for me please. Would you mind expanding a bit more on your disposal options particularly beyond what you already announced so the €500 million infra and 5% in ACCIONA Internacional? What could we see here? Are you potentially considering doing something more on energy or simplifying your group structure? And the second one is your 2020 EBITDA target. Does that include dilution for disposals? Thank you.
Yeah. The answer to your second question is yes. And the answer to your first question is we are – we have all our assets under scrutiny and there is no specific – there's no specific plans on any of the specific assets. However, more liquid assets should they need to be disposed of in order to adapt to the leverage policies. Obviously, the most liquid assets will have to come in first those, which have a better price possibility in the market. So we're acting very opportunistically here. No specific plans that we can mention however.
Next question, please.
[Operator Instructions]
If there's any more questions we give you – yeah, there's another one coming I think.
A follow-up from Oscar. Oscar, your line is now open.
Hello this is Oscar Nájar again. Thank you for taking the follow-up. Two quick questions. The first one is regarding the cost cutting €100 million seems quite aggressive for the size of the company. But could you please give us more details on how are you going to get this €100 million is this kind of base effects et cetera? And secondly, regarding your future CapEx you said several times that you're committed to the five gigas per year, okay that we were expecting. But could you give us more visibility on when Tenaska and the Australian new capacity in a yearly basis what kind of new capacity are you expecting? I don't know, Tenaska is 300 megas in 2022, 400 in 2023 whatever in 2020 onwards, could you give us more visibility there? Thank you.
On the cost-cutting measures, there is a natural decrease in costs related to the decrease in activity that accounts for around half of the objective. And then, there are multiple cost-cutting initiatives in all parts of the business that accounts for the other half. In respect of the visibility of the Tenaska and Australian projects, these are projects that we have capital deployment, mainly in years 2022, 2023 and 2024. And they will not have a big impact in, capital deployment in 2021.
It seems we have another two questions coming. Next question please.
Question from José Ruiz from Barclays. José, your line is now open.
Yeah. Thanks for taking my question. Just one, just a follow-up on, previous question from Óscar, on the cost-cutting initiatives the 50%, the €50 million is there any cost attached, any provisions that you have to do? Thank you.
That will be the net.
That will be the net result. I mean if we have to do a provision, that means that the actual -- the actual saving, it will be higher.
Next question please.
We have a follow-up question from Manuel Palomo. Manuel, your line is now open.
Yeah. Hi. Thank you very much again. Two questions, one is, about the provisions you booked in the first quarter 2020. This €68 million, whether you could provide a bit of -- well if you could shed some light on where it comes from? And the second is just sort of a confirmation or helping me to breach the D&A, impact for the full year.
Could I be almost right if I say well €21 million impact Q1, should be pretty much four times, by the full year? Thank you.
On the second one, the answer is, yes. On the first one, what we have included is €68 million of provisions in anticipation of different risks.
Next question please.
We have a follow-up question from Fernando Garcia. Fernando, your line is now open.
Hi. Thank you again for taking my question. It's regarding working capital. I think, you said in the presentation that, the effect of working capital of Infra business is €115 million. I would like, if you can provide further detail of what are the other items of the additional working capital impacts, in Q1?
And I know that, this is very difficult at the moment. But if you could provide some insight of what could be the working capital evolution, for the future, in the next three quarters of the year? Thank you.
I start for the last. In our estimation for working capital for the rest of the year is to -- with the logical cycle is to remain more or less flat, by the end of the year. So, that's our estimation with our new targets.
In respect to the breakdown of the working capital, I show you the most important one which is infrastructure. The rest is 47 in energy, out of which 25 has to do with the regulatory banding with the regulatory banding mechanism. And the rest of it has to do with delayed payments of land plots, for last year.
Okay. Seems there are no more questions. So thank you very much for participating in the call. We look forward to speaking to you soon. Thanks.