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spk04: Thank you for standing by. My name is Greg and I will be your conference operator today. At this time, I would like to welcome everyone to Farmland Partners Incorporated Q2 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Thank you. I would now like to turn the call over to Luca Fabri, President and CEO. Luca, please go ahead. Thank you, Greg.
spk08: Good morning, everybody, and welcome to our second quarter 2024 earnings call, conference call and webcast. We appreciate your presence here on this call and taking the time to join us because we see them as a very, very important opportunities to share more informally our thinking and our strategy in a more interactive format rather than the usual SEC public filings and press releases. But first, let me turn the call over to our general counsel, Christine Garrison, for some customary preliminary remarks. Go ahead, Christine.
spk01: Thank you, Luca, and thank you to everyone on the call. The press release announcing our second quarter earnings was distributed after market closed 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, July 25th, 2024, 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, rent, and the broader agricultural market. We will also discuss certain non-GAAP financial measures, including net operating income, FFO, 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 second quarter earnings, which is available on our website, farmlandpartners.com, and it's furnished as an exhibit to our current report on Form 8K, dated July 24, 2024. 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 Executive Chairman, Paul Pittman. Paul?
spk09: Thank you, Christine. I'm going to make comments about sort of four different topics today. One is the farm economy generally, land values, our cost control efforts, and our continuing discount to the net asset value of the underlying assets we own. So starting with the farm economy, we're in an environment today where commodity prices for the primary row crops like corn and soybeans and wheat are lower than they have been in the past several years. That is leading to certain challenges for farmers in terms of their cash flow and the strength of their balance sheets. As is typical, though, this is by no means a crisis. There are a few farmers facing, you know, gradual levels of distress, but there is no broad-based, you know, economic problems in the Farm Belt. This is highly consistent. With, you know, what has happened in the past and for me, I'm now on probably cycle 5 or 6 in my career. You go into a relatively lower commodity price phase. A few of the weaker farmers from a financial point of view get into trouble. But the overall market stays quite stable and quite strong and we expected that to be exactly the same this time. We do anticipate still getting modest rent increases on the rent rolls that we do, and we do not anticipate any significant change in our bad debt levels. And as you all probably know, our bad debt levels are almost zero, if not zero. Turning just a second to the West Coast markets, their commodity prices are also somewhat challenged, although there are some bright spots, like citrus, pricing is actually higher than it's been in the last couple of years. The major challenges, though, in California assets continue to be the same. Both the absolute water risk, what I call political water risk because of the rules and regulations, which sometimes don't line up with the reality of water. And then finally, continuing sort of increases in labor costs uh for the farmers out there uh coming out of you know what in my perspective are sort of bad policies coming out of sacramento but those are the challenges there but uh again uh similar to the grain belt not expecting any uh major crisis in the in that in that region um turning for a second the land values land values have sort of And the row crop regions hit a bit of a plateau. In this industry, a plateau is kind of what down feels like. As we all know, there's a sort of 6% per annum long-term average appreciation to the underlying assets. That, of course, does not come like clockwork. It comes a little bit of a lumpy style. And to refresh your memory, we've seen really, really high appreciation rates for the last three or so years. possibly as high as 15 or 20 percent on some assets in some regions. And so we're going to see the kind of revert to the long-term mean occur. And how that occurs is you'll go through a period where you get almost no appreciation in assets for a year or two, and that's how you kind of stay at that long-term approximately 6 percent appreciation factor. There, you know, what that means in kind of a practical matter, if you're reading newspapers in the U.S. Midwest, what's gone away from the, you know, the sales of high-quality farmland are still very, very strong. You know, the best land in Illinois and Iowa is easily $16,000 to $18,000 an acre virtually every time you try to sell it or buy it. But those sort of 20,000-plus sales that make headlines There's frankly less of those than there were. We've never marked our internal marks that we carry on our portfolio in terms of understanding what things are worth. We never use those super high outlier transactions. They're just not where the market is. We tend to use sort of where is the, you know, 75% of deals are getting done in X price range. That's the price range we want to use. when we think about the value of our portfolio. And we don't think that's going to go down very much. You know, it's hard to even measure a 2 or 3 percent move either way, but it's certainly a very tight bracket. We don't see any real risk in the row crop region of the portfolio for any kind of asset price declines. Turning then to California, California is a little different. People are frustrated about the water and the labor cost issues I talked about. Many institutions are concerned about their exposure in that region. As I've said in prior phone calls, we will gradually over time lessen our exposure to that region because of those factors. Cost cutting, as you all know, we changed the CFO role inside the organization during the quarter. We had our CFO, James Gilligan, leave the company. We promoted the long-term top accountants up into the CFO role. Susan Landy, she will speak here later today. We just didn't need that level of staffing in the finance department when we're in a position like we are now where we're not, frankly, growing very much. We're not raising a lot of capital. And we had more staffing at higher costs than made sense. James was a wonderful member of the team. We made, as per his employment agreement, the payout he was permitted to get, and he deserved it. This is all about cost-cutting, not about performance, and Susan Landy has been the top CPA in the company for many years and will do a great job as our CFO and help limit our our overheads in the in the home office in denver um then finally you know i'm like a broken record on this but i always want to make it clear we continue to believe we traded a deep deep discount to our net asset value i think that discount could be you know north of four or five dollars a share it is absolutely hugely huge we will continue to do our best to close that gap through things like asset sales and arbitraging the private market values for our assets against the public market discount. This is not a situation which we're going to allow to sit there forever. As a REIT, we're obviously constrained in the kinds of the numbers of deals we can do in any year by the tax law, and so we'll stay in compliance with that. But we will continue to drive, as we did in the 23 calendar year, to arbitrage the high private market values for our assets against the discounts in the public market. With that, I'm going to turn it over to Luca to make some additional comments.
spk08: Thank you, Paul. I only have a couple of very quick remarks. First and foremost, I want to remind everybody about the seasonality of our business from a financial reporting standpoint. Based on our investor relations activity and the calls that we've had, I know that we might have a couple of new investors listening to this call. And Q2 and Q3 in the calendar year tend to be the slower months because we don't have very much in the way of revenue recognition Other than the revenues that are spread all over the year. Typically, the first quarter and even more importantly, the fourth quarter in the year are the ones where we have higher revenue recognition and therefore a higher, you know, more prominent performance at the bottom line level. Speaking of that, I think that Q2 was, relatively speaking, a very, very strong quarter for us when compared to last year. Of course, on a net income basis, last year we had several dispositions that actually contributed to the gap bottom line. We tried to present, through our adjusted FFO, more of a view into what we consider the core performance of our business, and we had a very strong one indeed. If you think that from a gross book value standpoint, we actually dispose of about 10.4% of our portfolio, yet our operating revenues were down only 1.2%. So I think that that is a testament to the, frankly, the good work that we've done in improving our portfolio and pushing our revenues. and also managing our expenses. Our total operating expenses, which include, of course, overhead, which is harder to flex with the size of the company, we're down 7%. One quick note to prevent some questions that I certainly expect, especially after Paul's remarks, we haven't announced any significant asset dispositions in the year. As I've mentioned in the past in prior calls, we do expect to have some likely later in the year because of the safe hardware limitations that we are operating under this year. We are kind of postponing any asset, any disposition transactions until later in the year when we have a better view for what we have available. And finally, one quick remark also on the CFO transition. As Paul mentioned, Susan has already been a very, very important part of our team, driving SEC reporting and financial reporting in general in our company now for several years. So thanks to her experience with the company, experience in general, and James' active role in transition, I believe the transition was absolutely seamless.
spk02: and with that let me turn over the call over to her for her overview of the company's financial performance susan thank you luca i'm going to cover a few items today including the summary of the three and six months ended june 30th a review of capital structure comparison of year-to-date revenue and updated guidance for 2024. I'll be referring to the supplemental package, which is available in the investor relations section of our website under the subheader events and presentations. First, I will share a few financial metrics that appear on page two. For the three months ended, our net loss was 2.1 million and net loss per share available to common stockholders was 0.6, 0.06. lower than the same period for 2023 largely due to the impacts of dispositions that occurred in 2023. ASFO was 5 million or 0.5 million and ASFO per weighted share was 0.01 higher than the same period for 2023. ASFO was positively impacted by lower property taxes due to fewer properties, lower G&A expenses as part of the company's cost-cutting initiative, and increased volume of citrus sales on our directly operated properties. For the six months ended June 30, our net loss was 0.6 million, and net loss per share available to common stockholders was 0.05, lower than the same period for 2023, again, largely due to the impacts of dispositions that occurred in 2023. AFFO was 3.3 million and AFFO per weighted average share was .07, higher than the same period for 2023. AFFO was positively impacted by 1.2 million of income from forfeited deposits in the first quarter, lower property taxes due to fewer properties, lower G&A expenses as part of the company's cost-cutting initiative, an increased volume of citrus sales, on our directly operated properties. Next, we will review some of the operating expenses and other items, which is shown on page five. Property operating expenses were lower than for the three and six months ended June 30th, 2024, which are caused by, again, the lower property taxes, lower property insurance expenses, and lower repairs expenses. G&A increased primarily due to the one-time severance expense of $1.4 million in connection with the previously announced departure of the company's former CFO as part of the company's cost-cutting initiative. This is partially offset by lower salaries and travel expenses. Gain on dispositions was down from prior year as no farms were sold during this year. There was only a small fixed asset dispositions from a few properties reported in the six months ended. Income from forfeited deposits relates to the sale of a farm that was initiated back in 2020 where we received a series of non-refundable deposits over time. The sale was terminated by mutual agreement in the first quarter of 2024, and as a result of that termination, we recognized $1.2 million of forfeited deposits. Interest expense decreased slightly from a prior year due to lower outstanding principal balance. Next, moving on to page 12, there are a few capital structure items to point out. First, floating rate debt net of the swap as a percent of total debt was approximately 20%. Second, we had undrawn capacity on our lines of credit of approximately 158 million as of the end of Q2. In 2024, we have two MetLife resets that are set to happen in the fourth quarter on debt totaling approximately $27 million. The Rutledge facility was amended during the quarter to reduce interest rate by 40 basis points. In addition, the 2.5% annual reduction in the facility size was also eliminated. There was also a reduction in the facility size from 85.8 million to 75 million, as well as the introduction of an unused commitment fee of 0.2%. Page 14 breaks down the difference in revenue categories with a few comments at the bottom to describe the difference between periods. The few points that I would like to highlight are fixed farm rent decrease due to dispositions, as we were expecting. Solar wind and recreation changes were caused primarily by rent on land with a large solar project in Illinois that was higher in 2023 than 2024, as that project moved from construction to operational at the end of 2023. We will see this impact throughout the year, especially in Q4. Senate reimbursements decreased in the current year due to a one-time tax reimbursement in Q1 of last year, also dispositions that occurred in 2023, and a small number of leases that renewed with higher fixed rent, but with lower tenant reimbursements. Management fees and interest income increased with greater loans and financing receivables outstanding. Direct operations is a combination of crop sales, crop insurance, and cost of goods sold. It is up relative to 2023, largely due to a larger volume of citrus and walnut sales and lower impairment expense. Other items decreased slightly between the periods. Page 15 is our outlook for 2024. Assumptions are listed at the bottom. Note that we had three acquisitions in Q1 of 2024. There are no other transactions that are included in the projections. On the revenue side, fixed farm rent changes reflect the full year impact of 2023 transactions, plus the three Q1 2024 acquisitions and a few lease changes that occurred during 2024. Direct operations, which is crop sales, crop insurance minus cost of goods sold, is up due to higher expected performance in citrus farms under direct operations. On the expense side, G&A increased due to severance costs, but that's partially offset by targeted cost reductions. The forecasted range of ASFO is 9.8 to 12.8 million, or 0.2 to 0.26 per share. The low end of the range is slightly higher than the outlook from the last quarter. This summarizes where we stand today, and we will keep you updated as we progress through the year. This wraps up our comments this morning. Thank you all for participating. Operator, you can now begin the Q&A session.
spk04: Thanks, Susan. And at this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Once again, star one. And we will pause just a moment to compile the Q&A roster. And it looks like our first question today comes from the line of Scott Fortune with Roth Capital. Scott, please go ahead.
spk03: Yeah, good morning and thanks for all the detail. Just wanted to follow up and get a little color as we look into the second half next year on the renewal lease discussions you're having. And obviously you mentioned some of the pressure, downward pressure and volatility in many of the row crops for the farmers from that standpoint here. But just kind of what are your initial expectations with the farm economy coming off a little bit and just those discussions around rent, renewal leases for going into 25 to start here initially?
spk09: Yeah, this is Paul, and I'll take that question. And I'm in a different location than the rest of the management team today, so if they have anything to add, they will. So we would expect, just to give you the punchline first, We would expect rent renewals this year, hopefully in the 5% to 10% increase in terms of the leases we renew this year. That's still a pretty good increase, certainly not as strong as the last couple of years, which have been 15% to 20%. And that's, as I discussed earlier, kind of reflecting the lower commodity price environment. And it has not only the kind of financial impact impacts I mentioned earlier, it has kind of a psychological and emotional impact, which makes rent negotiations harder. So that's where we would anticipate. We're really early in the process, so it's hard to say exactly where that number will come out, but I think it will be in that bracket. The other thing to remember, and it's a very important fact, we are now starting on the leases. The lease is coming up for renewal this year, are leases that came up for renewal three years ago. So they got a very large increase on average three years ago. So we're really working off a much higher base. So it's not just the farm economy impact. It's all about whether you're working with a lease that was renewed during a boom time era in farming, which is where we are this time, As opposed to the last couple of years, we were renewing leases that had been renegotiated during a tougher economic period in sort of, you know, call it 17, 18, 19 era. And so it was much, much easier to get the big jumps. I hope that answers your question, Scott.
spk03: Yeah, no, that's great. That's a real good color on that. And just kind of follow up, I know you mentioned a little bit, but anything different, on the farmer's income and the economy in general. Like you said, we are seeing some distress there, but it's very limited from that standpoint. And then how does this kind of project as you look at, you know, you mentioned that we're going to do some dispositions potentially in more likely fourth quarter here, kind of since that third quarter will be kind of very, very similar to this last quarter. But a lot depends on fourth quarter. But just kind of your framework on kind of any additional distress out there. And then how that kind of portrays into kind of the dispositions or sales of assets like in that marketplace.
spk09: Yeah, I mean, if you own high quality farms, which we overwhelmingly do, I mean, we've got certainly some farms that aren't perfect, but many, many of our assets are exceedingly high quality. That market is still strong and deep. You can move a farm if you choose to move a farm. Our big constraint this year, just to refresh everybody's memory, is because we were so aggressive in selling assets last year, we actually are limited to seven total transactions for the calendar year. And we've actually already consumed one of those with a small sale of something in the Opportunity Zone fund that we own 10% of. So the reason we're waiting kind of the fourth quarter uh to the late third quarter fourth quarter it really gets focused on asset sales is we don't have very many bullets if you will and so we want to use them in the best possible way the most active time for selling and buying farms is the late third and fourth quarter and so that's why we haven't done much to date uh we would anticipate anything we sell will be you know will be On average, over whatever package of farms we end up selling will be a pretty substantial gain if we get a deal done. And we don't see a weakness in farmland values. My comments are all focused on the following. In the last three years, we have seen very, very strong gains in farmland. That has gone away. But that's not the same as saying there's a decline in value. I use the word plateau for a reason. We're just not seeing the gains we saw the last three or four years. We're also not really seeing a pullback.
spk03: I appreciate that. I will jump back in the queue. Thanks.
spk04: Thanks, Scott. And just another reminder, star one on your touchtone phone if you'd like to ask a question. And our next question comes from the line of Rob Stevenson with Jannie. Rob, please go ahead.
spk05: Good morning. Paul, given all your comments on the market and land values, at today's market pricing, how aggressively would you be buying farmland if you had a more normal cost of equity, or would you just be doing a select few deals and waiting for price to come back to you, just trying to strip out your cost of capital from the market conditions and whether or not you'd be a buyer if you had a better cost of capital here?
spk09: Well, if we had a better cost of capital, we would be buying farms. You know, there's not bargains per se out there because there never are. I mean, you can't say that land values don't really pull back in the bad times and then also say there's a bunch of bargains out there. Any time in my career where, you know, now spanning 30 plus years of doing this, you know, when there's a bargain, I look back on it five years later and it's a little like the lemon car you would have bought in a used car lot. You wish you hadn't bought it. There just aren't bargains on high-quality farms because farmers have strong personal balance sheets. But when you get to this kind of plateau period that we're in right now, this is the time to try to buy some farms if you had to cost capital. And the reason is that, you know, we don't try to steal a farm. I mean, when I hear investors, you know, trying to raise capital, talking about off-market deals and all this, it's nonsense. This market, it's not transparent to us sitting in the big cities, but I've been spending most of my time this summer back where I grew up in central Illinois. It's very transparent to that group of farmers in a 20-mile radius of their house. They know about every deal. They know about the pricing. They know about the quality of the farms. They've been driving by them every other day for their whole life. What happens when you get to this plateau is that, you know, when you work on your valuation, you've got a kind of static set of data. So you look at comps, you know, from the last six months or 12 months, and they're, you know, they're kind of flat. They're the same place. So you can use them as opposed to try to adjust them for how rapidly the market's moving away from you. And so it's really a very good time to buy farms. But as you indicated, Rob, we just don't have a cost of capital that allows us to do it.
spk05: All right. That's helpful. And then, Luca, you talked about dispositions in your comments. Any sort of commonality on the assets that you guys are going to be looking to sell in the back half of the year? Is that going to be a lot of West Coast stuff? Is it going to wind up being stuff out of your row crops, a mixture? How should we be thinking about the stuff that you guys are going to be teeing up to potentially sell in the back half of the year?
spk08: Yeah, I'm not going to give you a straight answer because I don't have one, frankly, certainly not one I can share publicly. We are considering evaluating various opportunities, some in California, some in the rest of our portfolio. We are unlikely to let go of any of most prized assets in the core of the Corn Belt, like in Illinois. But if somebody shows up with a strong offer, we will consider that as well. So can't give you much information, unfortunately. I'm sorry. But just hold on tight until later in the year.
spk09: All right. And then... Let me amplify that just a little bit, if you don't mind. You know, we... we keep this internal valuation of all of our assets. Our farm managers help us redo this internal value every, you know, year or six months. It depends if the market's moving rapidly. If people make us an offer higher than our internal mark on an asset, we're quite likely to sell it. I mean, we're in the business of making money two different ways, uh, appreciation and value. current income off of the farms. And as you've heard me say many times, probably two-thirds of your return to farmland is appreciation. So you can't kind of fall in love with anything. So if somebody shows up with a full-price offer in excess, you know, certainly if it's in excess of our internal view of value, we're likely to sell those farms. Luke is correct. You know, we do believe in the long-term core of the Corn Belt. It's probably more strongly than the other part of our So, you know, less likely to do sales there than anywhere else. And then the final point is we are on an effort to gradually lighten up in California. You know, we're not going to go out there and just sell everything we got just because we want to be out of it. But you should expect us to gradually lessen exposure to California over the next, you know, three to five years. It's just going to happen. So I hope that added a little more to it as well.
spk05: Yes, thank you. And then just, Susan, a couple of numbers questions. How meaningful is the reset on the $27 million of debt in the back half of the year? I think it's right around 3%-ish now on that combined $27 million. What is that likely to go to? Is that sort of high sixes? Is that what we should be anticipating there?
spk02: Yes, it is somewhere in the... Let me kind of flip to my numbers here. It is somewhere in the... Low threes. High twos, low threes currently, and we will likely end up in the sixes on that.
spk05: Okay. And then in terms of the guidance, the drivers that pushed cost of goods sold up $200,000 over the prior guidance and management fees and interest income down $300,000. Anything singular on that, or is that just a bunch of little stuff that combined into those adjustments?
spk02: Yeah, there's, there's a lot of little stuff that's combined into those figures, but the thing that to note on that guidance there, we, what I think really driving the majority of that is there's a citrus farm that is up. Let me, let me flip to my. numbers here. There's a citrus farm that we increased by a half million. That is because yields are up approximately 31% and the price is up approximately 14% on the revenue side. Correct.
spk05: Okay. That's helpful. Thanks, guys. Appreciate the time this morning.
spk04: Thanks, Rob. And our next question comes from John Masaka with the Riley Securities. John, please go ahead.
spk06: Good morning. There was some recent data from the USDA that seemed to drive some stabilization in almond pricing. Is that something you are seeing on your farms? And if that pricing does improve, is that going to impact the variable rent bucket in the current year?
spk09: Luca, you want to take that or do you want me to take it? I don't have a specific and factual answer, but I have a point of view.
spk07: Happy to take it.
spk08: Yeah, so I've seen some talks about a kind of bottoming out of almond prices, just also because we've seen some orchards coming out of production. We believe that our almond production assets are of a higher quality than average. And yes, the way we, some of our releases that are structured, we will be beneficiaries of stronger almond prices, at least up to a point. Ultimately, if there is a runaway in almond prices, the operator has its right. would be the main beneficiary. But to some extent, we will be beneficiaries as well, both directly in terms of higher variable revenues, as well as in having stronger tenants is always better.
spk09: And Luke, I want to add one comment, though, just for John's benefit. If we believed that there was a big bump in variable income or variable revenue already highly probable, it would be in our projections. So it's sort of, it's not to say it's not going to happen, but it's too early to tell. So, yes, there's a little bit of positive movement in pricing, but, you know, as an analyst, don't, you know, get the cart before the horse, so to speak, here, because we're just not sure yet.
spk06: And I just mean maybe kind of broad strokes. You know, there was an increase in the guidance, you know, this quarter versus last quarter in terms of, you know, variable rent payments. largely driven by what you already talked about in terms of the citrus, you know, farm. But I guess kind of how much of that bucket is citrus versus, you know, permanent crops like, you know, tree nuts. I'm just trying to think about how, you know, various kind of movements in pricing could impact that revenue stream.
spk09: Yeah, so let me give a general comment while the team in Denver, you know, pulls together a couple facts, John, to help you with that. So, So the big picture is to always remember, as an overall percentage of our revenue, variable isn't very high. So keep that in that context. This company is largely about fixed rents. And so I'll let the team in Denver try to break it down to the extent they can, a little more specifically on the different crop types. But I just wanted to make that general comment. Luca and Susan, you want to add anything to that?
spk07: I'll just chime in quickly.
spk08: I mean, our variable rents are effectively all, virtually all, if not all, coming from permanent crops. We don't, we really don't have any direct exposure to any meaningful way to row crop price variability.
spk06: Okay. That makes sense. And then I guess in terms of, you know, the reset or the adjustments on the existing debt. I know you kind of have an idea of where that's going to price today. I mean, is that basically set at this point? And I guess how close to the actual adjustment date is kind of the new rate set for that debt?
spk09: This fall, it's set very, very close. So if we get the benefit of rate reductions this fall, you know, in a general economic sense, it'll show up in that rate reset.
spk06: And then anything else to maybe, you know, conscious of in terms of moving pieces for some of the non-fixed, you know, farm rent line items? I'm just thinking kind of solar wind recreation or even stuff on kind of the management fees and interest income that maybe could move around a bit versus kind of a quarterly run rate.
spk09: I don't have any comment on that. If the folks in Denver have something to add, please do.
spk08: We do have a little bit of variability that we are expecting on the interest income, for example. So we're expecting a loan that we have outstanding to be repaid early, but nothing that moves the needle, you don't expect to move the needle on a global scale. I mean, think of the renewable energy leases as being, as going fundamentally in one direction. Typically, the movements there are driven by the conversion of option leases into full construction and then production leases, but we don't expect any here in the short term.
spk06: Okay. That's very helpful, and that's it for me. Thank you very much. Thanks, John.
spk04: Great. Thank you, John. And it looks like that is all the questions we have today, so I will now turn the call back over to Luca for closing remarks. Luca, the floor is yours.
spk08: Thank you. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters. Thanks, everybody.
spk04: And ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.
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