Sherritt International Corp

TSX:S

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Sherritt International Corporation's First Quarter 2018 Results Release Conference Call and Webcast. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, Wednesday, April 25, 2018, at 9 a.m. Eastern Time.I will now turn the conference over to Mr. Joe Racanelli, Director of Investor Relations and Communications. Please go ahead, sir.

[Joe Racanelli, Director of Investor Relations]

Good morning, everyone. Thank you for joining us today. As is customary, we will be following a presentation that's available from our website, sherritt.com. We will be making some forward-looking statements, and those can be found within our presentations. With me today are David Pathe, CEO of Sherritt; as well as Steve Wood, Chief Operating Officer; and Andrew Snowden, Chief Financial Officer. And each will be making remarks to put our results for the first quarter into context. Please go ahead, David.

[David V. Pathe, Chairman, President & CEO]

All right. Well, thank you, Joe. Good morning, everyone, and thanks for joining us this morning. A pretty busy quarter, so a few things to highlight for you this morning. It's also the first quarter that fully reflects Ambatovy at 12% following the completion of our restructuring of Ambatovy late last year. As we normally do, Steve and Andrew are both going to speak to some of the operational and financial highlights and provide you a little context to those. Before we do, there's just a few things I want to touch on as well.Over the last few years, you've seen we've been quite focused on strengthening our balance sheet and reducing our debt. That focus continued in the first quarter. You may have seen our announcements. We did repurchase $120 million worth of our debentures at an aggregate cost about $110 million, so at a slight discount, through a modified Dutch auction that closed during the quarter. That transaction was funded by -- primarily by our first equity offering in 10 years, an offering that was oversubscribed -- quite heavily oversubscribed and generated net proceeds of about $125 million.Combined, those transactions along with the cash flow out of all of our operations in the quarter left us with more cash and less debt at the end of the quarter than we started the year with. A few other highlights, we had a good quarter from our Cuban energy receivables perspective. We collected about $41 million in receivables and did see that overdue receivables balance come down a little bit.Net direct cash cost at Moa was $2.06 a pound, once again, for the fourth consecutive quarter in the lowest quartile in the industry cost curve. And I'll look at the industry cost curve in a few slides here a little bit closely and show you what's happening there. And a big part of the story in the quarter was higher commodity prices. And we've seen significant movements upward in all of our commodities over the last 12 months. The average reference price for nickel was up 29% to just over $6 a pound. That's the highest reference price we've seen in about 3 years.Cobalt's -- everybody's well aware of what cobalt's done. Cobalt reference price for the quarter was $39.01. That's up 97% year-over-year, and that trend has continued into the first quarter with cobalt trading at $40, $41, $42 at the moment.Average reference price for oil was up 22% as well to $55 a barrel and change.Over on Slide 6, you can see what nickel prices and cobalt prices have done over the last 15 months, along with the moving average trends. So you can see kind of the direction where it's going. You look at nickel on the left-hand side there. Nickel bottomed out at about $4.25 in July of last year. And there you can see the volatility since last summer, but the upward trend is pretty consistent since then. That volatility has continued in the first quarter as well. We did briefly touch $7 a pound. However, I think we're back in the low $6s at the moment, but it's certainly well off the lows of mid-2017. That's driven by supply deficits that we now have in our case come into after several years of surpluses. We've seen inventories come down over the course of 2017, global inventories on the LME and elsewhere. And that decline in inventory trend has continued to accelerate in 2018.Cobalt prices, has obviously been more dramatic. And you can see that trend on the graph on the right hand side there. It's driven largely by the supply concerns and the emergence of the electric vehicle theme, which continues to generate more and more momentum for cobalt and is now flowing into the nickel price as well.We saw the benefits of that in our cash flow in Q1, even with some of the production challenges we experienced at Moa from the weather perspective as we talked about when we issued our guidance and some of the rail issues we had there. But we're seeing that positive cash flow notwithstanding those because of -- driven by those higher commodity prices.To put these upward price movements in some context for you, just from Moa and ignoring Ambatovy since there's not cash in or out of Ambatovy at the moment, every dollar on the nickel price is worth about $40 million a year in free cash flow out of the Moa Joint Venture. And every dollar on the cobalt price is worth about $4 million.Over on Slide 7. Wanted to just highlight a bit more of what's actually happening in the nickel market for you, given the emergence of electric vehicles and where nickel supply is coming from. You see on the graph there that the forecast for 7, 8 years from now, in 2025, what nickel supply and demand is forecast to look like. And we really are now starting to see this bifurcation in the nickel market between Class 1 pure nickel that is battery-amenable and nickel contained in iron-type products, like ferronickel and nickel pig iron, which isn't useable at all for batteries. And so as there's concern of or possibility of new nickel pig iron production coming online, that does not add anything to the available nickel supply for battery and other non-stainless steel applications of nickel.Even within the Class 1 nickel supply, then you do see differentiation of the type of products. We produce the nickel briquette from powders at both of our operations. But the bulk of Class 1 nickel is actually in the form of cathode, really just a solid metal sheet or plate of nickel. And that although technically capable of being produced into batteries, is less amenable to the battery amenable -- battery production because it is much slower to dissolve in the battery production process, technically involves dissolving nickel in other metals, cobalt, into solution and acid and then precipitating out of the solution the alloys that form the cathode. And it's really only the nickel sulphates and briquettes and powders that are really most amenable to that process. And that forms a relatively small fraction, about 30%, of the Class 1 nickel supply.So we're expecting to see that trend continue over the next few years as the non-stainless steel applications of nickel continue to be the fastest-growing demand segments. And there's really only a fraction of the nickel market, which is where we're positioned, that can really meet that demand.On Page 8, you can see the nickel cost curve that we typically take a look at. See, Moa, as I mentioned earlier, at $2.06 a pound is at the lowest quartile once again. The lowest quartile is going to continue to come down. Those nickel producers, including us at the -- in the lowest quartile, certainly, benefiting from higher by-product commodity prices. And primarily that's driven by cobalt. Ambatovy was, obviously, out at the higher end given the issues and dealing with the cyclone there but is getting the benefit of the cobalt higher prices as well as improving nickel prices. And we do expect to see that Ambatovy cost come down as production recovers in the second quarter and then even more so in the second half of this year.What I really wanted to highlight for you on this is the way the shape of this curve is changing given the impact of by-product credits. A year ago, it -- the lowest quartile and that refers -- to qualify for the lowest quartile as a nickel producer, it took $2.88 a pound. Today, that number's $2.06. So the number of -- [indiscernible] the load of the costs for the bottom quartile of producers has come off about $0.80. And I say that's driven by -- primarily by by-product credits and the greater cobalt credit.You look at the 50th percentile, however, though, that's at $4.19 in the quarter. A year ago, the 50th percentile was at $3.78. So the shape of the cost curve is changing. The bottom quartile continues to drop, but the 50th percentile and higher up from there continues to actually -- starts to creep back up again. Out of that end of the cost curve, they typically don't get the benefit of by-product credits. And I think out there, you're starting to see higher energy prices bite, and potentially cost savings that have been driven out of operations over the last few years in some cases proving to be not sustainable. So you look, although our costs are going down in Moa, and the industry at the bottom quartile continues to get cheaper, nickel across the board from a cost production perspective has actually started to creep back up again in this more competitive cost environment.Those are the things I wanted to highlight for you off the top. I'm now going to ask Steve to talk to you about and provide a little context around some of the production for the quarter. And then we'll go to Andrew.

[Stephen James Wood, Executive VP & COO]

Okay, well thanks, Dave. And good morning, everyone. As I usually do, I'll be starting off with a quick discussion on our safety performance during the quarter. We continued to press forward with our safety plans across all of our operations to ensure that every employee goes home injury free every day. And in Q1 of this year, we actually had no lost time injuries, which is the first time since Q3 of 2005. So we're feeling like we're making some significant progress, and there's still a lot of work to do in the area of health and safety.Turning to the highlights for the Moa Joint Venture. On Slide 10, you'll see that on a 50% basis, Moa has produced 2,854 tonnes of nickel and 336 tonnes of cobalt in the quarter, which are down 26% and 23%, respectively, from the first quarter of the previous year. I want to put that production decline into some perspective. It was due to reduced delivery of mixed sulphides to the refinery in our Fort Saskatchewan operation. This was caused by 2 distinct developments. The first one is that we experienced the heavy rains of the fourth quarter of last year that carried over into the first quarter of this year. And they resulted in the highest levels of rainfall that we've seen there and -- well over 20 years. That's limiting our access to planned mining areas at Moa. And secondly, like many other companies with operations in Western Canada, we experienced transportation delays to the refinery by the rail service provider. The adverse impact of these record rainfalls and the rail transportation delays have been alleviated since the start of the second quarter, and we expect to achieve the lower end of our 2018 production guidance for finished nickel and finished cobalt at the Moa Joint Venture for this year.Of note, I'd like to point out that the refinery at Fort Saskatchewan will have its annual shutdown this quarter, the length of which will be similar to that of previous years. And for our unit cost, at Moa the NDCC was $2.06 per pound, which is down 37% from last year. And as Dave noted, the NDCC puts Moa in the lowest quartile for the fourth consecutive quarter. The decline in NDCC was largely driven by the higher cobalt prices. And in the first quarter, we generated a cobalt by-product credit of $4.27 a pound.Turning to the highlights for the Ambatovy Joint Venture on Slide 11. The first -- this is our first quarter reporting as the 12% owner as Dave pointed out. Nickel production there was -- in the quarter, was 688 tonnes while cobalt production was 49 tonnes. That's on a 12% basis. As you can see, these totals are down from our results in Q1 of 2017. And I should point out that our production results for 2017 are also presented on a 12% pro forma basis for a more relevant comparison.I'd like to put some of this decline in production into context. And in -- on January 6, Ambatovy was hit directly by Cyclone Ava, which is a category 2 hurricane-equivalent storm, and the cyclone necessitated a plant shutdown and caused extensive damage to the facilities and equipment. Production resumed at the end of January, following the completion of the critical repairs, while other repairs are ongoing today.Metal production in the quarter was also lower due to reduced production of sulphuric acid as result of a failed economizer in Acid Plant 1, which is 1 of 2 acid plants that we have there. Following some repairs, we're currently operating at about 50% capacity on that one acid plant. The other acid plant is running at full capacity.And as discussed previously, the metal production at Ambatovy will continue to be constrained by lower production of acid in Q2 of 2018, albeit at a higher level than in Q1. And production capacity is expected to be back to normal once the economizer is replaced in May. Efforts to replace the economizer will necessitate a shutdown of Acid Plant 1 for about 17 days in May.The net result of the cyclone and the economizer was an NDCC in the quarter of $5.34 per pound. And we expect the NDCC at Ambatovy to be significantly lower in the second half as a result of the repairs of the acid plant and a return to normal production levels.Now turning to our Oil and Gas operations on Slide 12. We produced 3,916 barrels of oil equivalent per day on a net working interest. This total marked a decline of approximately 56% from the previous year. The decrease was due to a number of factors: one, being the expiration of the Varadero West production sharing contract this past November; and as we've been talking about in previous conversations, the natural decline of maturing fields that we have there. As we expected, the decrease in the number of barrels produced had an impact on unit costs. And the unit costs were $28 -- sorry, $20.83 per barrel, which is up from the $8.66 per barrel in the first quarter of 2017.Now turning to our Power division on the next slide. We produced 202 gigawatts of electricity in the quarter, which is down marginally from Q1 of 2017. The decline was largely due to reduced availability of the natural gas that we use to produce the electricity. And as to be expected, the decline in production volume also resulted in some of the higher unit costs.So that concludes my review of our operational results. And I'll turn it over to Andrew Snowden, our CFO, who will review our financial results more closely.

[Andrew Snowden, Senior VP & CFO]

Thank you, Steve, and good morning, everyone. Earlier, Dave did mention that we ended the first quarter with a higher cash balance than December. And if we turn now to Slide 15, we can see the typical cash waterfall that we present, which shows our ending March cash balance at $237 million, which was a $35 million increase from December.There are 3 main drivers to that positive cash increase. One was $16 million of receipts from Moa, and that was primarily in the form of repayments in our working capital facility at Moa, and reflecting a strong commodity price environment despite a challenging quarter from a production perspective. Secondly, we had around $33 million of positive working capital changes, and that was driven by fertilizer pre-buys that we received in the quarter. And also the improved Cuban energy collections. And I'll make a few more comments on that later on in the presentation. Thirdly, following the transaction that we undertook in January, being the unit's offering, the repurchase of debentures and the related transition costs, we did retain approximately $10 million of cash. And so it's really those 3 key drivers that contributed to our improved cash position at the end of the quarter.Looking forward, I would expect second quarter cash flows to be a bit softer than Q1, and primarily because of timing of cash flows, the higher interest payments we've seen in second quarter and also the annual shutdown of the Fort Saskatchewan refinery that Steve referred to earlier.The debt buyback transaction, I just mentioned, which we undertook in Q1, is the most recent of, in fact, several initiatives we've undertaken in the past 4 years. And as we turn to Slide 16, we can see that the positive impact these assets have had to reduce our debt over that time horizon. We've essentially now eliminated approximately $2 billion of debt since 2014 in support of our strategy to strengthen our balance sheet. We started with the sale of our non-core coal assets in 2014 and related debenture redemption, the restructuring of Ambatovy that we've spoken about at length and also a couple of debenture buyback transactions, including a $120 million buyback that we just concluded in January of this year.These initiatives coupled with our efforts to extend the maturities of our debentures mean that we now have almost 4 years until our first maturity. Our overall balance sheet is the strongest it has been in years. We do remain committed to continue to focus on strengthening our balance sheet, and we'll opportunistically reduce our debt going forward.The impact of the debt-reduction initiative is a bit more apparent if you turn to Slide 17, which looks at 2 key ratios that measure out the health of our balance sheet. Basically, we highlight the reduction in our net debt over the last 18 months. And you can see the net debt reduced significantly. Firstly, from December 2016 to December 2017, with our Ambatovy restructuring. And then more recently through the course of Q1, with a stronger cash balance and the debt buyback. Similarly, we have reduced our debt-to-EBITDA ratio to 3.4, which is the lowest this metric has been in several years.We're turning now to our Cuban energy receivables. I'll just make a few additional comments there, and you'll see in Slide 18 some further detail on the movements there during the quarter.One key point that David already mentioned is we did receive around USD 41 million of cash on those receivables during the quarter. And that compares very favorably to the amounts we received in the fourth quarter, where we received approximately USD 7.5 million. So a significant improvement in those collections. And this has resulted in the scheduled overdue receivables decreasing during the quarter from $133 million at year-end to $127 million overdue at the end of the first quarter.Reducing these receivables is and continues to be a strategic priority focus, and it's important to understand that this balance does fluctuate and has fluctuated over the 25 years we've operated in Cuba. But we've never had any disputes with the Cuban government on the amounts that we're owed. And we continue to remain confident that we'll recover these amounts that are owed.Next I'll just make a few updates, a few remarks on our guidance, which is summarized on Slide 19. We did recently announce our guidance for production, unit costs and capital spending for 2018, and we made revisions to that in our first quarter release, which we updated yesterday. These updates reflect the positive outlook for commodity prices and also the recent developments in our operations. So I'll just make a few comments on some of the changes noted in this slide.Firstly, it's Ambatovy. We did reduce the production guidance for cobalt there by around 400 tonnes. And that's due to the lower forecast cobalt grade, which is -- although it's consistent with our original mine plan, the grade is slightly lower to that which we experienced in the course of 2017. Secondly, we updated our net direct cash cost at both Moa and Ambatovy, and that primarily reflects continued strengthening in the cobalt prices. With results of that strengthening, we've updated our cobalt price assumptions from $30 a pound, which we incorporated in our initial guidance, to now $40 a pound in the guidance that we've updated in our release yesterday.Though, at Moa the higher cobalt price, which has been partly offset by higher fuel oil prices and also, as Steve has referred to, the fact that we're tracking towards the lower end of our production guidance, resulted in a $0.75 reduction in our Moa NDCC. At Ambatovy, the higher cobalt price assumption has been offset or partly offset by the lower cobalt production guidance that I referred to earlier.Before turning the call back to Dave, I just wanted to make a few closing remarks on Slide 20. And this really just highlights the 2 new IFRS accounting standards which we adopted January 1, 2018. IFRS 9 is the new financial instruments standard, and this led to a number of changes in the measurement of various items on our balance sheet, although the impact to the income statement is fairly limited. IFRS 15 is the new revenue standard, and that did not have any significant impact on Sherritt's financial results.The specifics for this can be found in Note 4 of our financial statements, but I'm happy to follow up with anyone subsequent to this call, and if anyone has more detailed questions on these changes. That concludes my remarks, and I'll turn the call back over to Dave for his closing remarks.

[David V. Pathe, Chairman, President & CEO]

Okay. So just before we take your questions, you'll have seen in our press release that we have a plan going forward in our drilling activities on Block 10, and I just wanted to give you a little context around that.Those of you that have been following this will know that we suspended drilling in December on Block 10, following continuing difficulties in getting across these zones and the upper zone of the 2 zones in the Block 10 area, where we were losing circulation of the drilling mud, and we brought in various compounds to try and help heal those fractures that were leading to the loss of circulation. And we weren't having any success in that. And rather than continuing on, we wanted to take a step back and see what other options were available to us. Those have been evaluated over the -- over year-end and through the quarter, and as you saw the press release, we now believe we have a new technical solution to that. It involves primarily a new type of casing or at least new to us, the expandable casing that hasn't previously available to us because of the various trade restrictions in doing business in Cuba. However, expandable casing has been used extensively around the world, and certainly, a lot in drilling in the Caribbean.If you'll recall, we're drilling about over 5,000 meters to the total depth in the lower zone that we're targeting here. And the offsetting challenges we have are getting through these zones and the upper zone to get down to that lower reservoir where we originally hit oil we drilled vertically 20 years ago involves maintaining sufficient hole diameter to be able to have sufficient torque on the drill bit to get all the way down to that lower zone. And each time you set a stage of casing, we lose about 1.5 inch of the diameter of the boreholes, so we can only set casing so many times before we get down to total depth. What the expandable casing option gives us, and if you flip over to Page 23 in the slide, you can see a bit of a schematic of how this looks. It gives us the ability to get -- an extra string of casing beyond what we've been previously able to do. And so by having this expandable casing, that literally is what as it sounds, we can insert in the hole, and it actually expands and helps maintain hole diameter for the next layer of casing that will be inserted through that. Gives us the ability as we hit these zones where we were losing circulation of drilling mud to insert in set casing, and yet still maintains sufficient hole diameter to help you get the torque on the drill bit to get down into the lower reservoir.So our plan for drilling will be much the same as it was when we started the last attempt at this in the third and fourth quarter of last year, where, we'll be backing up back to the 9-5/8" casing and breaking out of the hole there, once again, and then drilling through the -- into the upper reservoir and looking to penetrate -- get through that -- through these loss circulation fractures. And then on down, now having the extra flexibility of an extra casing string. So we're currently in the process of getting all of that imported into the country. We don't actually want to start drilling until we have all the materials that we'll need for the drill hole on the ground in Cuba and on site so that we minimize the amount of time that the hole is open. That should have us starting drilling in late June, early July. And hopefully, some results for you on that -- before the end of the third quarter.A bit more detail on that is in the press release, and -- but we'll have more updates for you as the year goes on. I just wanted give you a bit a -- the sense about what it is we're doing there.Lastly, before we take your questions, I just wanted to acknowledge the political changes that we've seen in Cuba. I'm sure everybody has read that Miguel Díaz-Canel was elected President by the Parliament in Cuba on April 19, effectively succeeding Raúl Castro, who had been in the position for 12 years. But this really marks the first time in a couple of generations that the person holding the title of President in Cuba has not been a Castro. This is all really as expected. President Díaz-Canel was actually put forward as the first Vice President of the country a few years ago and was expected to succeed to this position. Raúl Castro remains Chairman of the party and Head of the armed forces. And so this orderly transition that we've been expecting to see there for some time continues to unfold. President Díaz-Canel has indicated that he remains committed to the gradual economic reforms that we've seen in Cuba over the last few years, and we expect to see the stability that we've seen over the last few years continue, and we're quite encouraged by that.Our long-standing relationships and operations in Cuba continue. We remain Cuba's largest foreign investor, and we're not expecting to see any real change in the status quo there for us in the near or medium term here.That's what we all wanted to cover for you this morning. So with that, operator, we will happily take any questions anyone may have.

[Operator]

[Operator Instructions] We'll go ahead with our first question from Jacques Wortman of Eight Capital.

[Jacques P. Wortman, Research Analyst]

Okay. It looks like the oil -- the Cuban oil gross working interest, bopd, was tracking well above the 4,300 to 4,800 guidance in Q1, and power cost of $17.22 per Megawatt hour was well below the guidance range of the $20.75 to $21.50 per Megawatt hour for the year. Can you just give any additional guidance regarding the profile of these metrics over the balance of the year? And if you can kind of -- if it's possible to give us sort of a quarter-by-quarter outlook on both Power and Oil?

[David V. Pathe, Chairman, President & CEO]

Sure, Jacques. Thanks. So on the first one, on oil, the guidance we've produced, obviously, is annual guidance, so it averages across the year. I think the primary difference you'll see in oil production is sometimes it holds up a little better than we're expecting, but obviously we do see a natural decline rate over the course of the year. And then we'll can see if we can get you a bit more context around kind of what to expect quarter-by-quarter. It was a strong production quarter from an oil perspective. But we will see that continue to decline just in accordance with the natural reservoir declines because there is no more infill drilling going on, on that reservoir. The net working interest was up a bit more than the gross working interest. And frankly that relates more to just the allocation of some costs, given that there is less activity on Block 10 than we were anticipating when the cost guidance was done, given where we're at in the drilling, and it's really just an accounting entry that leads to more costs being allocated to the production block, which then comes back in the net working interest [ in their ] cost recovery oil. On the Power side, I don't have a lot for you off the top of my head frankly, and we can see if we can give you a bit more detail on that. We do see -- typically see some fluctuation in operating costs from quarter-to-quarter, which really just has to do with the timing of maintenance turnarounds on the different turbines, so cost will jump up and down a bit depending on which or how many turbines or when turbines are down for maintenance turnarounds. And so there wasn't anything in the quarter, though. It was a good quarter from a cost perspective that caused us to want to change the guidance for an annual perspective at this point in time, but I think it's primarily the timing of maintenance that drives that.

[Operator]

[Operator Instructions] We will take our next question from Orest Wowkodaw of Scotiabank.

[Orest Wowkodaw, Senior Equity Research Analyst of Base Metals]

Just curious what cobalt price are you assuming in the revised cost guidance now for the 2 nickel assets.

[David V. Pathe, Chairman, President & CEO]

So the guidance at year-end was based on about $30 cobalt, and so -- and now with the forecast going forward, we've plugged in $40 cobalt. So you see the $10 uptick then offset somewhat, as Andrew mentioned, by what looks like our creeping up fuel oil costs and other costs at Moa. That's what led to the reduction of the range at Moa by $0.75.

[Orest Wowkodaw, Senior Equity Research Analyst of Base Metals]

Okay. And then just on production guidance. I mean it was a pretty weak quarter at both operations in Q1 on the nickel side. What gives you confidence that you can still make even the low end of the guidance ranges for these assets?

[David V. Pathe, Chairman, President & CEO]

Well, taking Moa first, which is really where the primary focus is. Part of the production loss came from the heavy rains at Moa. But part of it also came from the rail interruption difficulty. So that mixed sulphide that just -- that exists and was produced in Moa but didn't make it to the refineries in -- on timely basis to be processed. So that mixed sulphide exists and is still in the system and is making its way to the Fort now. And there is excess capacity in the Fort beyond capacity of the Moa JV -- the Moa part of operation to produce when we -- in the past we have -- when we've been able to fill up excess capacity at the Fort with third-party feed from time to time when it's economic to do so. So we do have the capacity to make up with excess capacity at the Fort for that where the mixed sulphide does actually exist. Secondly, the guidance that we put out for the year did largely take into account these events. The guidance we've published for Ambatovy, we knew of the hurricane or the cyclone in the southern hemisphere and the extent of the damage they produced there, and so that was factored into the guidance. And the Ambatovy production for the quarter was actually about where we expected it to be. And when we say when we get the asset -- in the beginning of second quarter, we'll be better than the first, but we'll not be back to where we want to be. And when we put the guidance out at year-end, we did mention, I believe, that H2 or the second half of the year for Ambatovy, was going to be a much heavier production half than the first half of the year. That's -- was our expectation. Obviously, Ambatovy has had variability and volatility in its production in the past. But that certainly is what we are expecting in terms of the forecast.

[Operator]

Ladies and gentlemen, this concludes the Q&A session for today. I would like to hand it back to Mr. Joe Racanelli for closing remarks.

[Joe Racanelli, Director of Investor Relations]

All right, David.

[David V. Pathe, Chairman, President & CEO]

Well, thank you very much for joining us again once again this morning then. We do have our Annual General Meeting on the 12th of June. Hopefully, we'll see many of you there, and we'll be back to speak to you again in 3 months' time, when we report the second quarter. Good luck with the rest of the earnings this week, everyone. Thanks very much.

[Operator]

This concludes today's call. We thank you for your participation. You may now disconnect your lines, and have a wonderful day, everyone.