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Good morning, and welcome to FIBRA Macquarie's First Quarter 2024 Earnings Call and Webcast. My name is Shamali, and I will be your operator for this call. [Operator Instructions]. I would now like to turn the conference over to Nikki Sacks. Please go ahead.
Thank you, and good morning, everyone. Thank you for joining FIBRA Macquarie's First Quarter 2024 Earnings Conference Call and Webcast. Today's call will be led by Simon Hanna, our Chief Executive Officer; and Andrew McDonald-Hughes, our CFO.Before I turn the call over to Simon, I'd like to remind everyone that this presentation is proprietary and all rights are reserved. The presentation has been prepared solely for information purposes, not a solicitation of an offer to buy or sell any securities. Forward-looking statements in this presentation are subject to a number of risks and uncertainties.Our actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. These forward-looking statements are made as of the date of this presentation.We undertake no obligation to publicly update or revise any forward-looking statements after the completion of this presentation, whether as a result of new information, future events or otherwise, except as required by law.Additionally, on this conference call, we may refer to certain non-IFRS measures as well as to U.S. dollars, which are U.S. dollar equivalent amounts, unless otherwise specified. As usual, we have prepared supplementary materials that we may reference during the call as well. If you've not already done so, I would encourage you to visit our website at fibramacquarie.com and download these materials. A link to the materials can be found under the Investors Events and Presentations tab.With that, it's my pleasure to hand the call over to FIBRA Macquarie's Chief Executive Officer, Simon Hanna. Simon?
Thank you, Nikki. Good morning, everyone, and thank you for joining us. On today's call, we will discuss our first quarter 2024 results, our growth initiatives and discuss our proposed tender offer for Terrafina. Andrew will also provide an update on our balance sheet, robust capital position and guidance for 2024.In the first quarter, the positive momentum we experienced last year, coupled with the successful execution of our strategy has converted into earnings growth. In underlying U.S. dollar terms, our NOI was up 10.2%, driven by a record quarterly print for consolidated revenue. This top line-driven performance has translated into a 10.1% increase in our first quarter cash distribution when compared to the prior comparable quarter.We also continue to advance on the execution of our industrial development program. I'm excited to announce that in the past few days, we closed on a strategic 25-hectare land parcel in the core industrial market of Monterrey for a total consideration of $12.4 million, representing an attractive acquisition price.This well-located site is less than 2 kilometers from our premier Apodaca Industrial Park that has been successfully built out.With this multibuilding project, we look forward to delivering another Class A industrial park in one of Mexico's top industrial markets with initial works to commence later in the year. As of quarter end, we have 1.5 million square feet of GLA under development or in stabilization with NOI contribution to flow in coming periods as beneficial occupancy of recently leased buildings and expected lease-ups are completed within our underwriting time frame.We've positioned FIBRAMQ to grow alongside the ongoing demand for well-located, high-quality industrial space. In addition to what we have already and what we have in process, we have another 4 million square feet of potential development GLA, which we intend to complete in a phased approach over the coming years.We particularly value the strategic land bank located in the core industrial markets of Northern Mexico where we believe the long-term nearshoring tailwinds will preferentially benefit.Overall, market conditions have a favorable outlook. Energy and infrastructure availability remain a challenge for the broader industry, which in certain cases are slowing the development process and timing of new starts.We anticipate this dynamic should keep new supply constraints, providing us with additional pricing power while we utilize our development expertise to progress through our pipeline in a measured way.In terms of our operating portfolio, we delivered another strong quarter in our Industrial segment, and we're seeing a sustained recovery in retail. In our industrial portfolio, our same-store NOI growth was 6.7% in underlying U.S. dollar terms as we realized double-digit re-leasing spreads and high occupancy.We closed the quarter with occupancy at 98.2% and with continued momentum in lease spreads where we achieved an 11.8% increase on commercially negotiated renewals. We Highlights of leasing activity in the quarter included a U.S.-based industrial logistics supplier in Micali and the South Korean-based auto parts manufacturer in Saltillo, taking that market to full occupancy for our portfolio.Turning to our Retail segment. We're pleased with the sustained progress we have seen and are reporting positive data across our key metrics. In the first quarter, foot traffic was up 18% from last year and has now returned to pre-pandemic levels.Continuing with this positive trend, NOI was up 2.6% sequentially as we achieved solid leasing spreads. Cash collections were again stronger and weighted average lease term continues to extend alongside real increases to average rents, indicating the ongoing improvements in leasing conditions.We feel constructive about our retail leasing pipeline and the outlook for our properties, which mainly provide a range of essential services in high-density urban areas. An additional highlight in the quarter included obtaining our recertification as a gold level green lease leader, which recognizes our industry-leading initiatives around sustainable practices.At the end of the quarter, approximately 38% of our industrial portfolio was green building certified, which is in line with our target and ahead of the target KPI of our sustainability-linked loans.Finally, I want to comment on our recently announced nonbinding tender and certificate exchange offer for Terrafina. As I have discussed and as we have demonstrated, FIBRAMQ has a portfolio and a platform which positions us to achieve attractive growth and realize the opportunities presented by the favorable backdrop of the Mexican industrial market.We believe the proposed transaction represents a superior alternative for Terrafina and [sabifi] holders as well as an attractive strategic acquisition for FIBRA Macquarie.There are compelling reasons for a combination of FIBRA Macquarie and Terrafina, including the transaction being AFFO and distribution accretive on a per Sabifi basis. It will also enhance the Sabifi trading liquidity.The complementary portfolios will create a more compelling footprint, allowing the combined platform to serve additional demand driven from the favorable market tailwinds. The transaction will also allow Terrafina to benefit from FIBRAMQ scalable, vertically integrated full service development and operating platform.Furthermore, we see a potential to realize meaningful synergies through the combinations of portfolios, scale and broader SG&A costs. We're confident that this combination has the potential to create an unmatched platform, benefiting from our expertise and demonstrated track record of accretive capital deployment and which we believe would significantly accelerate both FIBRAMQ and Terrafina's long-term growth strategy for the benefit of all certificate holders.Our proposal is a merger of equals that would create the largest industrial FIBRA in Mexico and bring superior value creation opportunities for both sets of investors. We have provided additional details about the benefits on our proposal, on our website, and we encourage those interested to review them. We remain optimistic regarding our outlook and are encouraged by the market backdrop, and I want to thank our entire team for their continuing commitment.With that, I will now ask Andrew to discuss our financial results, balance sheet and liquidity position and guidance for 2024.
Thank you, Simon. For the first quarter, we delivered AFFO per certificate of MXN 0.6368. Our balance sheet remains well positioned with prudent leverage metrics and strong liquidity to support our growth strategy.As of March 31, our real estate net LTV was 33% and our net debt-to-EBITDA multiple was 5.1x. Our weighted average cost of debt was 5.7%, and we have no scheduled maturities until 2026. Taking into account committed undrawn credit lines and surplus cash, FIBRA Macquarie has available liquidity of approximately USD 340 million at quarter end.We remain well positioned to fund our developments and thoughtfully commence new buildings in our existing projects as well as selectively pursue land acquisitions to execute on our growth pipeline.We declared a first quarter distribution of 52.50 centavos per certificate in line with guidance, representing an annual increase of 10.1% in underlying USD terms and a prudent 82% AFFO payout ratio.Additionally, during the quarter, we paid an extraordinary distribution of MXN 2.27 per certificate, which was comprised of USD 30.7 million in cash and USD 71.7 million paid in sabifi to comply with FIBRA regulations.We are reaffirming our full year FY '21 guidance. We continue to expect the full year 2024 AFFO per certificate range of 2.55 to MXN 2.6 or $116 million to USD 120 million terms, representing an annual increase of between 6% and 8%. In line with our established guidance, we expect a 2024 cash distribution of MXN 2.10 per certificate to be paid in equal quarterly installments.Our outlook anticipates solid NOI growth in both our industrial and retail portfolios, which will be partially offset by a combination of the impact of an assumed peso appreciation as well as the financing cost of near-term investments in FIBRA Macquarie's industrial growth CapEx program, which we expect to meaningfully contribute to additional revenue and AFFO growth over time.We believe Mexico is well positioned to capture growth opportunities arising from global and regional trends as nearshoring continues to drive demand for real estate in Mexico. With FIBRA Macquarie's portfolio positioning and our track record of disciplined capital management, we expect to be a key beneficiary.Furthermore, we believe we have an exceptional opportunity to create meaningful value through a potential combination with Terrafina. Along with Simon, I want to thank all of our stakeholders for your ongoing support.And with that, I will ask the operator to open the phone lines for your questions.
[Operator Instructions]. Our first question comes from the line of Juan and with Bradesco BBI.
Regarding your bylaws, I understand that there are hurdles in place that make you an unlikely target for consolidation in most cases. However, given the activity in the sector, how do you guys see this possibility? Could there be room for any type of negotiation? Just wanted to hear your thoughts on this scenario just hypothetically speaking, that would be great.
Yes. Hi, Juan, it's Simon here. Thanks for the question. Yes, look, we're not contemplating any change at all in our bylaws, and we're happy with the setup of our business well. So, I think that puts us in a good position to maximize performance and to allow us to continue with our business strategy.So, obviously, we're monitoring what's going on in the market. There's a lot of the important themes with regards to consolidation, internalization, we're monitoring that. But at the moment, we feel we're well placed with the structure that we have.
Our next question comes from the line of Alejandro Fuchs with Ita.
Congratulations on the results. Sorry, my connection was a little bit bad. Sorry if I repeat something but I wanted to ask two very quick ones. The first one is on the land that you purchased in Monterrey? What kind of your loan costs are you thinking about this project?And the second one is, how are you seeing the availability of land overall in the regions that you currently have when you did this parity in Monterrey? How are you seeing those dynamics playing out?
Thanks, Alejandro. We can hear you. So, I think the land acquisition that we just announced 25 hectares, it's in a fantastic position, we're very close to the airport, very close to our existing Apodaca Industrial Park, which as I mentioned earlier, were we're in the process of building out and it's very successful.So, we think that the land site location is fantastic with regards to what that means on yield on cost. It's very much within the range of about 9% to 11%. So, we think we're set fair on that, as you can tell by the purchase price sort of getting to around a $50 level on a square meter basis, which is attractive, certainly, for that part of Monterrey.Look, I think with regards to broader availability of land in Monterrey and other parts of the country, as we can appreciate it's only getting harder with regards to getting access to good land where you also have access to utilities, et cetera. But that's the business where we're in.We've got a very good pipeline, I would say, off the back of this to consider other opportunities, whether it's in Monterrey or our other target markets. We have a very core focus looking at markets beyond Monterey, which includes Tijuana, Mexico City, Guadalajara and Juarez.So, I think there's promising opportunities that we're seeing in our core markets, and we think we can follow this up with other purchases as well. So, yes, it's not getting any easier, but something which I think we have a good outlook on.
Our next question comes from the line of Alejandra Obregon with Morgan Stanley.
I have one on your development pipeline. So, as I look at some of your projects, it seems that some of your lead 35 projects have some of your higher and perhaps recently raised yields.So, I guess the question and I'm wondering if you can help us balance both the additional investment that you need to make in order to have a fully certified asset versus perhaps the incremental rent that you can get from placing an asset that is fully certified. I don't know if there's a correlation to both things.
Thanks, Alejandra. I think you're looking at it the right way. We fundamentally believe that, that additional investment, which we're making ultimately translates into additional value creation.I think when it comes to green building, what we certainly appreciate is aligned with what the tenants appreciate in the sense that there's a direct correlation on utility savings, whether that be energy or water that translates into bottom line savings ultimately for the customer.So, that certainly does have an amount of value creation there, which we think ultimately is getting recognized. And the reality is that as time goes on, when we're building Class A buildings and absolutely Pipestones the only early developer in the country doing that at the moment. We're basically able to present those properties to the best type of tenants, multinationals who really value that type of certification and sustainability benefits.So, you're definitely playing with the best type of customer profile, credit profile when you're able to deliver the best product into the market and certainly ESG and lead benefits as part of that. So, that's demonstrated in the recent track record.We're delivering best-in-class green-certified buildings. We've been printing closer to 12% in the recent developments, certainly north of 10% over the last couple of years. But we think with that focus, the 9% to 11%, even with that additional investment, we'll be realizing additional value. So, we're confident in that strategy.
I'll just complement to what Simon was saying there as well. I think we are developing for long-term resilience of these assets and it's only going to become increasingly more important as our customers and the broader community work towards their own net zero and sustainability goals to partner with them and to provide a premium product in premium markets that deliver those solutions to the customers. And I think as a result, we're able to attract a premium price for those particular opportunities and projects.
And perhaps a follow-up. I mean if there's demand and there's upside to rent from an elite certified product, does that justify potentially running out to all the other assets that you have, if that's possible? Is that something that could make sense?
Yes. So, what we're doing there, Alejandra, we're applying a certification, which is, if you like, the sort of the retrofitting green building certification. It's been very successful in progressing for north of 30% of our portfolio in applying that retrofitting. That's basically getting energy and water enhancements at least 20% above base with some of those enhancements.So, that's certainly creating, I think, an opportunity as well to have those savings being pitched to our tenants, whether existing or potentially new. We're doing that alongside the lead certification, which is something that can only be done as a core and shell certification as part of the development angle with that certification that we're running.So, between the lead certification for development and the edge certification for existing properties, I think we're getting good coverage over time.
Yes. We've actually made further commitments on that front as well with respect to green building certification with a KPI over the next 10 years to receive 75% of our overall industrial GLA to be certified, which is also, as Simon mentioned, driving the benefits for the customer as well as the environment and also supports our green financing and savings that are coming through by achieving that KPI with annual step-ups and increases over time.And so, as of today, we're at 38%. It's already halfway there to achieving them. They're incrementally more challenging as you work through the portfolio. But certainly, we see a path there, and there's a real quantifiable benefit to our interest cost by doing that as well.
Yes. Just to finish off, I've said this a couple of times very proud, but I think it's very impactful for the broader market to understand. We have delivered in our Monterrey project, a 10.4% yield on cost for lead platinum 90-point score. It is a world record for the points core and lead platinum. It's 1 of only half a dozen buildings in the world, which have been developed in the industrial sector to that lead certification.But we've shown in Mexico, you can deliver that to the market with a yield on cost of 10.4%. We know that the stabilized value is a lot tighter than that. So, that's just so much evidence, I think, to ourselves, but importantly to the broader market that you can do this with great returns.
Our next question comes from the line of Gordon Lee with BTG.
A couple of questions actually on the retail side. 18% is a lot in terms of traffic growth, even considering the sort of the fewer nonworking days this month, which I guess would have benefited foot traffic in some of your properties.So, I was wondering if there's sort of a common theme driving some of this. Could it be cinemas that are finally back? Or what is it that you're seeing that maybe prompted that increase? And then the second question just very quickly. Where is your retail portfolio marked on appraisals as for the end of the quarter on a cap rate basis?
Look, we're happy to see the traffic levels get back to pre-pandemic levels. It's been a bit of a journey, but I think it's pretty great to get there. And look, I don't think there's any sort of silver bullet there. There is a little bit of cinema and gym activity certainly coming back. To be honest, I think there's still more upside when it comes to cinema activity, numbers that I would say is still not where they necessarily were pre-pandemic.So, there's a bit there. Gyms are doing better for sure. But still, I think, working through some formats being more successful than others, but we have signed a new gym format in the quarter, and so we are seeing different models, if you like, better capitalized players coming in and taking some investments.So, that's been fantastic. And actually, when I think about the last 12 months, we've done quite a lot of new leasing on gyms and so that's definitely a segment that's coming back.In terms of what that means, though, for underlying performance, I think what we've seen now for a number of quarters is that the foot traffic itself isn't necessarily a direct driver of NOI or leasing activity. I think there's been a little bit of a divergence over time and the fundamental drivers for profitability for our tenants.It's not as, I would say, dependent so much on the foot traffic would perhaps, but behavior changing with which family members or how many family members are going to the supermarket, et cetera, for their shopping trips.So, the important point that we have seen is that same-store sales are consistently up that we're seeing better capitalized tenants coming into the sector and at the mix format, the format that we have necessity-based with a very attractive mix of cinema gym restaurants. It's working particularly well, and we think there's still upside opportunity to come.
Picking up on your second question in terms of the retail valuation, we currently got the retail portfolio marked at a 9.8% cap rate on in-place rent. That comfortably steps up north of 10% once you take into account the stabilization of those properties, as Simon mentioned, which continues in terms of that NOI growth.So, we did take a little bit of heat out of those valuations. And so, they're still 11% below the 2019 levels. And we think very fair given the current market environment. Importantly, we continue with our external valuation on a biannual basis. So, those are validated by CBRE every 6 months.
Our next question comes from the line of Isabella Salazar with GBM.
I was wondering if you could give a little bit more detail on what the time line of development given the monthly acquisition is.
Great. Thanks, Isabel, for the question. Look, we've just acquired in the last week. So, we're straight away working on the initial permitting contracting earthworks. So that's in line with our usual processes.So, in short, we won't be expecting anything from an income addition, if you like, certainly this year or the next, but we'll be looking to basically be performing the execution of that going vertical once we get through those basic phases and we're going to be looking closer to 2026 as real income contribution.
I think particularly, we'll continue to be disciplined on that front. We do have 200,000 square feet just down the road at our Apodaca development under construction at the moment due for delivery before June 30 of this year.And so, certainly, we've got a healthy pipeline and the capacity for an additional building in that particular development project as well. And so, we're well positioned to keep bringing product to market in Monterrey over the coming quarters.
Our next question comes from the line of Francisco Chávez have with BBVA.
Congrats on the numbers. I understand your rationale for your views for Terrafina. But in case that your bill is not the successful one, is there another plan to unlock value and increase liquidity of your CBFI?
Thanks, Paco. Look, we think FIBRA Macquarie today is very well positioned with the platform that we have, the portfolio positioning and the growth that we have to, particularly through our industrial CapEx program or growth CapEx program. So, we think actually we're set very well today to execute on that.We fundamentally believe that with the model that we have and the growth prospects that we have if we can execute on that, continue to deliver the total returns that we have been delivering in the last few years. That's ultimately got to translate to market recognition and continued rerating, if you like.We had a fantastic year last year, a 45% total return in U.S. dollars for investors. And we think that with the opportunity we have in front of us this year and beyond, we can continue to drive the total return in a similar manner. So, we're looking forward to that. The tender offer that we presented at the start of this week, that's really an important opportunity to go beyond that, of course.We think it's a disciplined offer from Macquarie perspective. It's also a very fair offer for our investors and one that's uniquely accretive. So, I would like to also take the opportunity to reinforce that, that we think it's certainly something where we're not making up the numbers. And we believe we have a very compelling offer.It's the accretion on day 1 is compelling. Certainly, something that should not be ignored when you think about the fact that, yes, we do have some accretion, but our other alternatives have important dilution on an earnings basis, also on a dividend basis.So, that total swing factor from day 1 could be as high as 30%. That ultimately makes a big difference in terms of that cash coupon you're collecting every quarter. So, that's an important consideration. The ability to rerate immediately or in the shorter term, I think it's there as well, just with the combination and the trending of liquidity that we'll have.We're actually up to $3 million at the moment, which has been an important improvement over recent quarters. But adding that with Terrafina, the important thing is we're cracking the $5 million number, which we know is an important entry level for a lot of investors who are very much attracted to the story, but would even be more attractive on that combined market cap basis and the liquidity there that as of today, they are a bit shy on.So, that's more of, I would say, a silver bullet, if you like, in changing some of the training fundamentals that aren't there today on a liquidity basis, and that will be the benefit for both shareholders.The other aspect I'd like to call out, we do see this very much as a merger of equals. We have roughly 50% shareholder base for both sets of investors coming into the combined entity.But it's more than that. It's a similar portfolio when it comes to size and scale and a very much a complementary portfolio when you think about the highest exposure that we in the market to those northern near-shoring markets, complementing that with what the Terrafina portfolio that will basically consolidate the strategic footprint for both debt to the shareholders.So, that's quite attractive and something as I say, it's starting with the point of us having the highest exposure in the northern part of the country. And then with that, upon that combination, the long-term value creation, we think, is also compelling.The fact that we have that business model where we're doing the development inside the FIBRA, we can accelerate that development program. And we have the proven track record and capability of driving those superior total returns through the strategy.We've talked about the yield on costs we're delivering, what that means in terms of 10% to 7% revaluation profits for shareholders. We can accelerate that. And we can do that using our in-house platform, which we think is the leading property management platform in the country. It's vertically integrated. It's scalable, 90 people strong. It's not just property management.It's full service, including the ability to drive our development program, the growth CapEx program. So, that will continue to deliver compelling same-store performance, which we're seeing this quarter and for a while now, but also deliver on the development program.So, overall, we certainly think this is a compelling offer and something that makes sense. And, to come back to the original point of your question, yes, we're in a fantastic position today, but it will be fantastic if we were able to move forward with the tender.
Yes. I think the other thing to complement Simon there, it's Andrew here. We're getting a real recognition from a wide range of investors of the disciplined track record that we have, particularly around capital management, which is something that really stands us apart from a number of our peers. And you can see that when you look at our NAV per certificate growth over the last few years, which is just shy of 60%.We've delivered FFO per certificate growth of 25% since the fourth quarter of 2020 and 33.5% distribution growth over that same period. And that's a really powerful value creation story that the market is really, I think, responding to. And I think at the attractive entry level that FIBRA Macquarie provides today, we'll see that as a compelling offer for investors more broadly.
Our next question comes from the line of Francisco Suarez with Scotiabank.
Congrats on the numbers. I followed up from Paco's question on your options to unlock value and close the valuation gap. Considering that there are 6 pieces for Terrafina, would it make sense to actually cut your termination fee because that may attract, I don't know, some of those 5 bids might be willing to invest with you or partner with you or do something else? And would you consider that to be an option?And, my second question is a related question. Assuming that you are not able to close the valuation gap and capped equity markets. And then if you're unsuccessful in your merger with Terrafina, your overall leverage has declined over the last years. I like to see you guys playing more opens. Now, roughly speaking, you are at 5x net debt to EBITDA. What level of leverage would you be comfortable with in order to keep on loading property development on your own without tapping the equity markets?
So, I might take the first question there. Look, we've been quite consistent saying that we believe that the business model that we have and the structure that we have, we're happy with that. It provides a great platform for success and in that respect, we're not considering any changes to our structure. And more to the point, when we think about what's driving that discount historically, we don't think it's anything so much to do with those factors that you've mentioned.But we think it's more to do with the factors around low trading liquidity and basically how you can solve that over time and the total returns, how you can execute on total returns, building that story with the great program that we have and continuing to deliver on that.So, we remain focused on executing the business plan, as I say, as the key focus and we'll continue to do so with regards to the balance sheet question, I'll hand that one over to Andrew.
Yes. Happy to take that one. Thanks, Paco. I think you're absolutely right. We have trended down in terms of the positioning of the balance sheet, combined with increasing our liquidity and available source of capital. And so, ultimately speaking, we've historically guided the market to an LTV target in the range of 30% to 35%.We're comfortably at the lower end of that range, particularly given the market backdrop and tailwinds that we're seeing, we're very comfortable in terms of seeing that trend up and use a little bit more to the balance sheet to execute on that development program.However, we won't do that at the cost of being undisciplined. And so, we'll continue to ensure that we're delivering high-quality product, attractive returns and investing in a measured manner.But certainly, you're absolutely right. And sort of where that means today is I think we'd be comfortably having firepower in the order of $350 million or thereabouts to deploy, which would interest up to, call it, 36% or thereabouts without considering any other revaluation gain or uplift on our investment property valuations there.So, very well positioned to continue to execute, and we will continue to do so where we see those attractive opportunities.
Our next question comes from the line of Alan Matches with Bank of America.
Just a question on the retail portfolio. Would you consider divesting it at this point in time? And do you see FIBRA Macquarie being an industrial pure player, I guess, in the medium, long term? Or just your thoughts on this?
Thanks, Alan. Look, when it comes to retail, we haven't really changed our views from recent quarters where, I'd say that, we are very happy with what we own today. It's a fantastic portfolio that's performing very well. We think there's upside opportunity where we see the current metrics and the outlook, we have a very constructive outlook on retail. So, we think there's value generation to come.So, that's our immediate focus is optimizing the value generation, the operational performance, and we'll be working on that through the year. Alongside that, though, I think you make a valid point in the sense that investors increasingly prefer specialized fibers or special large REITs and particularly being in industrial and so at least in Mexico. So, we do see that, and we see the merits of potentially one day, but being specialized.We don't think right now is the moment just because, as I say, we think we'll be leaving important money on the table. So, our current focus is maximizing the value of our retail portfolio. And in line with that, we'll be monitoring how market conditions evolve.
We have reached the end of the question-and-answer session. I'll now turn the call over to Simon Hanna, for closing remarks.
Thanks, Shamali, and thanks, everyone, for participating in today's call. Look, we look forward to speaking with many of you over the coming days and weeks, and we'll be updating you very soon again at the end of the third quarter. So, thanks very much, everyone.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.