This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

Farmland Partners Inc.
2/23/2023
Welcome to the Farmland Partners Inc Q4 2022 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Please press star 1 on your telephone keypad to ask a question. If you change your mind at any time, please press star 2. For operator assistance at any point, star 0. Thank you. Now, let me turn the call over to Paul Pittman, Chairman and CEO, So, Paul, you may begin.
Good morning and welcome to the Farmland Partners fourth quarter and full year 2022 earnings conference call and webcast. We appreciate you taking the time to join us for these calls. We see them as an important opportunity to share with you our thinking and our strategy in a format less formal and more interactive than public filings and press releases. I will now turn it over to our general counsel, Christine Garrison for some customary preliminary remarks. Christine?
Thank you, Paul, and thank you to everyone on the call. The press release announcing our fourth quarter earnings was distributed after market close yesterday. The supplemental package has been posted to the investor relations section of our website under the subheader events and presentations. For those who listened to the recording of this presentation, we remind you that the remarks made herein are as of today, February 23, 2023, and will not be updated subsequent to this call. During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impact of acquisitions, dispositions, and financing activities, business development opportunities, as well as comments on our outlook for our business, rents, and the broader agricultural market. We will also discuss certain non-GAAP financial measures, including net operating income, SFO, adjusted FFO, EBITDA RE, and adjusted EBITDA RE. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the company's press release announcing fourth quarter and full year earnings, which is available on our website, and is furnished as an exhibit to our current report on Form 8K, dated February 22, 2023. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC. I would now like to turn the call to our president, Luca Fabri. Luca?
Thank you, Christine. I will make some very brief remarks about the year behind us. 2022 has been a very strong year for U.S. agriculture in general and our company, Farmland Partners in particular. Global events have really highlighted throughout 2022 the key role the U.S. agriculture plays in addressing global food demand, partly a blessing of geography, but also thanks to the absolute world-class infrastructure and pool of talent the U.S. agriculture enjoys. Especially on the row crop side, high yields and high prices have led to strong P&Ls for farmers. There have been some increases due to inflation in certain farming inputs, but the biggest cost factor increase in businesses in general in 2022 interest rates has only affected U.S. agriculture as a whole relatively marginally because of the very low leverage in the industry in the low teens the strong farmer profitability has and profitability of the whole sector is translated into a strong pricing for farmland in general as an asset class which of course we have greatly benefited from from but also has helped the company have a very strong um renewal season for for our rents uh in in the specifically in the rents that we evolved especially in fixed cash friends in grow crops we've seen increases of 16 across the board for beginning for the ones that renewed more in general for fbi it's been a strong year we were able to deliver significantly earlier in the year as we were looking down the pike at the interest rate increases we were able to strengthen relationships with our lenders, putting us in a very, very strong liquidity position. I mentioned the strong rent renewals. On the negative side, we have faced, despite delivering higher interest costs, of course, that have impacted our P&L, but also we have experienced in permanent crops a little bit of the opposite of what we have experienced in row crops. Our portfolio in permanent crops is heavily weighted in California which has experienced several years of drought leading to excuse me leading to low yields while at the same time globally there has been a permanent crop markets have experienced a combination of low demands still due to lingering COVID impacts as well as high yields overall our acquisition activity in 2022 has been somewhat modest, mostly due to the high cost of capital, both equity and debt. We have been very choosy in our acquisitions, but we have been able to actually capture the potential transactions that were particularly attractive. With that, I will pass the floor to our Chairman and CEO, Paul Pinman, for some remarks on the outlook.
Thank you, Luca. So it's sort of a bad deal here that Luca gets to talk about last year, which was a pretty strong year, and I get to talk about next year, which will be quite a bit of a challenge. But, you know, really where we are is we have faced, as Luca said, you know, significant drought in California. That drought is, as you all know, sort of behind us in the sense that it has been incredibly rainy and snowy on the West Coast. The problem as it translates into our P&L, and obviously the stock price this morning is reflecting this, is that there's a substantial tail of revenue that comes from those specialty crops in the following year. So the lack of rainfall behind us will lead to a relatively challenged specialty crop performance in the 2023 calendar year. And that added with the increased cost of interest rates is what's doing the damage to our AFFO for the 2023 year, as you see in the guidance. That being said, it does sort of set the stage for what hopefully would be a pretty strong 2024 because we're going to see, you know, a substantial return in specially cropped volumes. It's a little hard to predict price. but we'll see volumes recover substantially. But that doesn't have an effect, unfortunately, until 2024. So thinking kind of broadly about what's occurring here, farmland has two components of return. It always has, and it's the current yield and the asset appreciation. The asset appreciation is probably the bigger of the two. And we have seen very, very strong asset appreciation, certainly amongst our row crop properties, and despite the drought, probably to some degree, even among the specialty crops. Inflation drives farmland values up without question. What we're very disappointed about, and I'm a huge shareholder, so I'm personally very frustrated with, is all of the very strong things happening in the farm economy and therefore in our portfolio on the row crop side are being taken away by the volatility, the negative volatility at this point in time on the specialty crop side. This is leading to stock price that fundamentally vastly undervalues the portfolio We own some of the best farmland in the world, and we are trading at a very large discount. That being said, from an investor's perspective and from my perspective as a stockholder, we've got to do something to stop having the relatively smaller piece of our assets, 20-25% of our assets are in these specialty crops, sort of being the tail that's wagging the dog. This is the boom times for row crop. It will go on for at least another year on the row crop side. And we've got, as I said, the negative effect of volatility on the specialty crop side. What that's frankly causing us to do is seriously evaluate, given where we want to be as a company, as a stable long-term store of value, whether we should continue to be involved in the specialty crop business. It's important to remember that a couple of years ago, the specialty crop side of our business was the engine of AFFO and was performing quite strongly. And there is this ebb and flow. But as i said the volatility caused in the specialty crop side of the business and there is there's sort of no structure you could could set up to take that away um or at least not very very many structures that could take it away is really hurting the underlying story um that is so so powerful and so successful on the row crop side it's really sort of a almost a tale of two different industries in terms of our what's happening to the underlying tenant base and operations of the two businesses and therefore, you know, effect on our rents from the two different sides of the business. The, you know, the best value in farmland today, in my opinion, is, you know, we were here a few years ago and we're here again. The best value out there in the market is, frankly, our stock. We can buy high quality farmland through our stock better than we can do by buying farms. So it's something we need to really kind of focus on as a company. So my perspective is that the underlying farm economy is very strong on the overwhelming majority of our assets, the row crop side. that the specialty crop side will substantially recover because the drought has been lessened quite a bit this winter. But the P&L impact of that recovery is unfortunately not going to really show up until the 2024 year. During Q&A, obviously willing to go deeper into this and what we're seeing out there and what we intend to try to do. But I'm going to turn it over to James. to go through the comments regarding past quarter and past year performance.
Thank you, Paul. I'm going to cover a number of items today, including summary of full year 2022 and Q4 2022, review of capital structure and interest rates, greater detail on revenue buildup, and guidance for 2023. I'll refer to the supplemental package in my comments. As Christine said, the supplemental is available in the investor relations section of our website under the subheader events and presentations. First, I'll share a few financial metrics that appear on page two. For the 12 months ended December 31, 2022, net income was $12 million compared to 10.3 million for 21, an increase of 1.7 million. Net income per share available to common stockholders was positive 16 cents compared to negative 17 cents for 21, an increase of 33 cents. AFFO was $15.8 million compared to 0.4 million for 21, an increase of 15.4 million. AFFO for weighted average share was 30 cents compared to one cent for 21, an increase of 29 cents. Improved performance was due to increased fixed rents, increased brokerage and auction revenue, reduced litigation expense, and reduced distributions on preferred stock. Cost of goods sold was higher in 2022 due to the greater number of farms under direct operations in 2022 compared to 2021. General administrative expenses were higher in 2022 largely due to the acquisition of Murray Wise Associates, or MWA as we say internally, in late 2021. For the three months ended December 31st, 2022, net income was $6.7 million compared to $13.3 million for Q4 2021, a decrease of $6.6 million. It should be noted the gain on dispositions of assets was $7.2 million lower in Q4 2022 compared to Q4 2021, accounting for all the decrease in net income between the periods. Income per share available to common stockholders was 11 cents compared to 14 cents for Q421, a decrease of 3 cents. Again, this was impacted by the difference in gain on disposition of assets, as noted a moment ago. AFFO was 10.0 million compared to 8.9 million for Q421, an increase of 1.1 million. AFFO per weighted average share was 18 cents compared to 19 cents for Q421, a decrease of 1 cent. Q422 showed higher fixed rents, management fees, interest income, direct operations profits, and lower litigation spending compared to Q4 2021. Those items were offset by lower variable rents, increased general and administrative expenses, and higher property operating expenses, largely due to higher state franchise taxes, higher property taxes, and higher insurance premiums. Next, I will skip ahead to page 13 to make a couple of comments about our capital structure. Total debt at December 31st, 2022 was $439.5 million. Since December 31st, 2021, we have reduced debt by over $70 million. Fully diluted share count as of February 17th was 55.6 million shares. If you look at the table on the bottom of the page, between the MetLife Credit Facility and the Rutledge Farm Credit Mid-America Credit Facility, we have undrawn capacity in excess of $160 million today. As shown in previous quarters, we have approximately $174 million of MetLife debt with rates that reset in 2023. These are loan numbers 1, 4, 5, 6, 7, and 10. The notes at the bottom of the page show the four loans representing approximately $109 million of that $174 million that have already been agreed to. $5 million has been reset to 5.63%, and $104 million has been reset to 5.55%. The reset loans also have increased flexibility to prepay without penalty, up to 40% of original principal balance per year. Next, I will turn to page 14 to provide an overview of our income statement. Over the last year, we presented numbers in categories shown on the top table of page 14. Fixed payments, variable payments, direct operations, gross profit, and other items. This was an effort to make the business easier to understand. However, this presentation may have made it a little difficult to model out the business because it did not detail out the building blocks that comprised the different categories. The second table on page 14 does just that. It shows the building blocks for both gap revenue, line items, and supplemental categories. Reading across the rows, you can see what makes up the supplemental categories, and reading down the columns, you can see what makes up the gap line items. Page 15 shows these building blocks described on the previous page for 2021 and 2022 by quarter with comments at the bottom of the page to describe the differences between the periods. A few points to highlight are fixed farm rent increased as we acquired properties and renewed leases and decreased with this decisions. Solar increased in 2022 as a large project in the state of Illinois commenced its construction phase. Tender reimbursements declined with asset dispositions and farms that converted to direct operations. Management fees increased as we managed more acres for third parties in 2022 compared to 2021. In Q4 2022, we acquired land and buildings for four agricultural equipment dealerships in Ohio under the John Deere brand. The accounting treatment classifies those acquisitions as financing transactions, so on the balance sheet they appear as loans. and on the income statement it impacts interest income. This accounts for the increase in interest income in the fourth quarter of 2022. Variable payments were down due to lower performance in tree nuts and grapes caused by lower prices and yields during the Q4 harvest. In addition, citrus farms that produced variable payments in 2021 converted to direct operations in 2022. Direct operations is a combination of crop sales, crop insurance, and cost of goods sold. It was up in 2022, because of the citrus farms that converted to direct operations, as mentioned a moment ago. Other items increased for the full year of auction and brokerage activity in 2022 compared to 2021. At the bottom of the table, we show the increase in fixed payments on same row crop farms. When we talk about same row crop farms, we mean row crop farms that were in the portfolio before the beginning of the period being compared, or in this case, January 1st, 2021. It does not include specialty crop farms, acquisitions, dispositions, or other non-comparable farms between the periods. This group is up approximately a million dollars between the years. Next, on page 16, we compare the guidance range from October to actual performance with notes at the bottom of the page. Direct operations gross profit was lower than expected due to lower pricing and yields in the Q4 harvest period and crop insurance payments that will lag into 2023. Property operating expenses were up compared to expectations due to the required credit allowance on the Ohio Ag equipment dealership acquisitions, higher than projected state franchise taxes in the fourth quarter, and higher than projected property taxes in the fourth quarter. On the next page, page 17, we have the outlook for 2023 using those same building blocks described on page 14. On the revenue side, fixed farm rent increases due to new leases signed and farms acquired in 2022 that will contribute a full year in 2023. Solar, wind, and recreation are up slightly, while tenant reimbursements will be pretty consistent with 2022. Interest income increases with a full year's contribution from the Ohio equipment dealerships mentioned before. The variable payments and direct operations are decreasing in 2023. The decrease in variable and direct operations is due to the items Paul noted in his comments. Lower yields due to weather and poor pricing due to supply, demand, and balances. On the expense side, property operating expenses are increasing due to assumptions of higher property tax and higher insurance premiums. G&A is in line with 2022. Legal and accounting decreases with lower litigation spend. Litigation spend will be down from approximately $1.3 million in 2022 to an estimate of $250,000 in 2023. Interest expense is up due to higher base rates on floating rate debt and interest resets that will occur or have already occurred in 2023. The bottom of the page provides greater detail on the assumptions behind interest expense. We use forward curves from Bloomberg and estimated remaining 2023 resets at three-year Treasuries plus historical spreads. This results in AFFO in the $9.3 to $13.5 million range compared to $15.8 million in 2022. AFFO per share is in the range of 17 cents to 24 cents compared to 30 cents in 2022. This wraps up my comments this morning. Thank you all for participating. Operator, you can now begin the Q&A session.
Thank you. As a reminder, if you would like to ask a question, please press star then one on your telephone keypad. If you change your mind at any time, please press star two. And for operator assistance at any point, it's star zero.
Thank you. We now have the first question on the line from Dave Rogers of Baird.
Please go ahead. Your line is open.
Yeah, hey, good morning out there. Paul, I wanted to start with your comments around the specialty crops and your belief that that's obviously having a pretty big negative impact on the stock recently and today. So it seems like NOI and the guidance is actually not that far off and maybe a little lower than anticipated, but certainly the interest expense is more disappointing, and I think you've communicated some of that. But I guess what gives you the sense that the specialty crops are the big drag on the portfolio? And then I guess maybe a follow-up to that is if you chose to sell those and reinvest that capital, how would you do that?
Yeah, you know, look, this is something we're evaluating, so no one should take from our comments that we are going to exit specialty crop, but we're certainly considering it. So, you know, here's a big picture, and I'm using these things a little bit anecdotally, so please don't take exactly the number and go model it. But in the leases we rolled over on the row crop side, Luca alluded to this, and I think James did as well, we got a 16% average increase on the fixed cash rents on the row crop that we rolled over to new three-year leases. And if you recall last year, we got approximately 10%, I think, when we did those rolls, something in that range. So on the row crop side, the high inflation, strong yields on the crops, and high crop prices due to worldwide shortages of these key commodities is driving us to have increasing positive returns and results, growing rents essentially, and rapidly appreciating asset values on the row crop side. When we turn to the specialty crop side, what we are experiencing And it's mixed up and complicated to unravel because of all the specialty crops with the exception of citrus. Most of the revenue or a large portion of the revenue shows up in the next year in these long marketing tails. So the negative impact of the drought is really having a 2023 impact equal to or greater than the drought impact during the 2022 financial year. So the 23 year gets hurt by the 22 drought. And then on top of that, what has happened is in many of these crops, we had a big crop coming off the 21 year. We've got excess supply in many parts of the world on the tree nuts especially. So you've got this double whammy as we project during the 23 year of relatively low yield due to the drought and, frankly, relatively low price due to these supply-demand imbalances on a worldwide basis. That, you know, so back to your core of your question is, you know, what diversification has gotten us is there's something bad going on somewhere all the time. And it is, you know, very frustrating to me as a shareholder and as the chairman and CEO. And what we want to try to do is figure out a way to substantially dampen that volatility. Because you've been with us, Dave, for many years now as an analyst on the company. And what happens on the row crop side in the bad times, you know, we've lived through them in year 15 through 19, basically, 2015 through 2019. You're talking about maybe you can't get a rent increase, but you're not talking about big rent decreases. And the reason is it's fixed cash rent. And so the bad era in the row crop side, and it will come again, doesn't drastically reduce and create volatility in RP&L. especially crop side because of the nature of the way those leases are. And we get these big swings. And I think it's frankly hurting us and it's hurting the price of the stock. So we've got to figure out how to have that stop happening. It might be joint ventures, might be dispositions, might be some other way of structuring our leases. There's a lot of choices. But we've got to get that problem to frankly go away. I hope that answers your question.
Yeah, I appreciate that caller. And I wanted to go back to one other comment you made, which was you thought about two thirds of the value of owning a farm over time is the appreciation in the land. And I guess I wonder where you think cap rates are going and yields have moved. And I think maybe part of that question comes from the fact that you're repricing debt into the mid to high fives, which is largely now consistent with where your implied cap rate is. So I'm curious, again, how you view kind of the underlying farm market and prices moving there with the aggressive move in debt costs that we've seen.
Yeah. You know, the... The good news in many respects is that the farmland market has continued to appreciate even with higher interest rates. These high interest rates will gradually put a damper on prices. Common sense and history suggests they must, but it hasn't really occurred yet. And when I say put a damper on, it will stop the growth of the asset values. It won't probably reverse it very much, if at all, on the row crop side. And the reason for that is the overwhelming amount of these purchases are done with cash. The farmers are quite profitable. Farmers drive the asset values on the row crop side, not institutions. And so they bought farms. Those farms were in very strong hands. And so I just don't think you're going to see asset values come off with high interest rates, and you certainly haven't seen it happen yet on the row crop side. Institutions like us, and us in particular, because that's what I know about, these high cap rates have really dampened the amount of purchasing we are doing of new farms. And it's going to until the cost of capital goes back down. And when it's hard for us to buy farms at a negative spread, even though we're very confident the five and a half percent or greater average annual appreciation of row crop farmland will continue. I mean, that's a statistic that's in place now for more than 50 years. It's not going to change, but it's hard for us as public company to be in the market when our cost of debt capital is an excess or equal to five and a half percent. The, you know, if back to the cap rates on the underlying assets. The problem is if you take high quality Illinois farmland, it is trading today at a two and a half cap. And I don't see that changing. It's a counter cyclical asset class when you get right down to it. It's not really driven by Wall Street or institutional money. It's driven by small town rural America money primarily. And know worldwide food demand climbs supply demand to volatility of the key commodities around the world is high you know it's ukraine south american drought all kinds of other issues so high quality u.s farmland is continuing to be viewed by the people that drive the underlying asset value as a very very good investment a great store of capital a great long-term wealth creator What we've got to do is figure out how to get that to convert into our stock price. And, you know, unfortunately, we're not communicating that very well for, you know, some reason. And part of it's just, you know, volatility on the specialty crop side.
All right. I appreciate all the details, Paul. Thanks. Thanks.
Thank you. Your next question comes from Steve, Rob Stevenson from January. Please go ahead.
Yes, good morning. This is Steve Domanski for Rob Stevenson. Just wanted to see if you could please provide more insight on the four agricultural equipment dealership acquisitions.
Yeah, so we acquired the real estate, not the operations. We acquired the real estate underneath four different John Deere dealerships in Ohio. The operator of those dealerships is a company called AgPro. AgPro is the largest John Deere dealership network in the United States. They have something in excess of, I think, 80 separate dealerships. We bought those four dealerships. The driving reason to do that transaction is really several key points. First is the cap rate and the return on those is pretty strong, certainly stronger current yield. Then you experience on on on farmland in most cases, certainly on row crop farmland. 2nd, big driver is that it was frankly feel like those those dealerships are in locations, particularly a couple of them where we get pretty, pretty good long term appreciation of the underlying asset. John Deere dealerships are really tied strongly to the row crop farm economy in particular. We think it matches up with our general sort of thesis that row crop farmland is very valuable. It will continue to appreciate value. We think these assets will appreciate value. Credit quality of tenants is obviously quite high. But in addition, it networks us through that dealer network to a whole lot more farmers, a whole lot more relationships. I mean, we're kind of wrapping ourselves in the flag of John Deere a little bit in terms of how we can reach out to farmers that use that dealer network. And that's one of the strongest brands in the world, frankly, certainly the strongest brand in agriculture. So there's a lot of sort of synergistic benefits to cracking that door opening and making some investments in that sector. But it will not be the core of our business by any means. It will remain a tiny percentage of what we do. Because what we really want to focus on most is really the row crop farmland and high-quality farm assets generally that appreciate over time is really the core of our long-term story.
Thank you. That was very helpful.
Thank you. As a reminder, it's Star 1 to ask any more questions today. And our next question comes from the line of Craig Kikura. We may proceed.
Yeah. Hey, good morning, guys. I apologize if I missed this. There's a lot of calls going on right now. But, James, I know that you had the debt resets here that you announced in the press release that are resetting here in the first quarter. How are you thinking about dealing with the remaining resets in 23 and in 24? Do swaps or interest caps come into play?
Yeah, we've looked at that a little bit. Our assumptions are we kind of noted them in the supplemental where we provide guidance. What we're kind of looking at is we're looking at the forward curves and we're also using kind of historical spreads to think about sort of how those will likely reset when we come upon those dates. So that's how we've kind of modeled them out. We have had a lot of conversations with not only the incumbent lender, but also potential new lenders on ways to sort of deal with that debt in a different fashion. And so we're continuing to bring competition to bear where we can, frankly, get everyone's good ideas and approach those resets with all the arrows in our quiver that we can.
Got it. And Paul, I know that you tend to take a very long-term look, as most farmers do, on the asset value and how to think about things. And your guidance has maybe you know, $25 to $50 million of asset sales. But does it make sense maybe to increase those sales when you can sell at such a deep discount to debt costs and maybe improve your per share results? Or how do you kind of think about that as we are in a higher interest rate environment?
So, yeah, we do certainly think about asset sales all the time. I mean, and, you know, look, we balance a variety of things when we think about asset sales. You know, first is, are we getting a really good price and a fair value for the asset we own? And you're correct. You know, there's a lot of money flowing out there into this asset class and cap rates are low and we could sell assets and buy back stock. our philosophy generally is don't sell what we call the crown jewels type farms, you know, if it's an A plus farm or an A farm. And the reason is it's almost impossible to buy that stuff back unless you, you know, pay dearly from a financial point of view. But you know, if it is a farm that's kind of been underperforming or it's a farm that we're not in love with, we're actually looking at many, many asset sales. Don't want to sort of over predict a certain amount, which is why you see the guidance where it is. But I think we're pretty dedicated to trimming parts of the portfolio where we can get a profit and redeploy that capital into debt reduction or frankly into stock buybacks given what's happened this morning.
All right. Thanks, guys. Appreciate the color.
Thank you. To ask any further questions, please press star and one on the telephone keypad.
As we have had no further questions, I'd like to hand back to Paul Fitman, Chairman and CEO.
Thank you. Thank you all for joining us for this phone call today. I mean, I was disappointed in the stock price performance this morning, as many of you are. You know, I think it is important to keep things in perspective from a financial point of view. You know, 2022 was a very strong year. 2023, as we have predicted, will be a more challenging year. But that is the nature of production agriculture. It almost sounds trite, but they grow these crops outdoors. And so we will be a subject of, which has happened here, of volatility driven by weather and commodity pricing. On the other hand, it is the long-term averages of performance in the sector that drive farmland asset values and long-term return. And what we all know is that global food demand continues to go up and therefore demand for farmland will continue to go up. And we are seeing that in terms of asset value appreciation. That asset value appreciation is frankly probably still occurring in the specialty crop side of the portfolio, just not as rapidly as it is occurring in the row crop side. And even though you have a year of tough performance in terms of crop yields and things like that, the long-term demand for almonds and pistachios and citrus is still a worldwide positive outlook. And so I don't think you're going to see significant reductions in asset values, but you're going to see a challenging 12-month period time in terms of the PML in front of us. And we'll get through this. It'll be a, you know, real positive long-term story and it will continue to be so. On the real crop side in particular, given what continues to happen with production around the world and what's going on in Ukraine slash Russia, U.S. farmland and demand for U.S. farm crops will remain elevated, in our opinion, for the next 12 months at least, and that will be positive for the rent rolls we do in the 2023 year, for example. With that, I'll conclude, and thank you all for your time.
Thank you all for joining. That does conclude today's call. Please have a lovely day. You may now disconnect your line.