ZIM Integrated Shipping Services Ltd.

Thank you for standing by and welcome to the ZIM integrated shipping services second quarter 2025 financial results conference 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 would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star one. Thank you. I'd now like to turn the call over to Elana Holtzman, Head of Investor Relations. You may begin.

Thank you, Operator, and welcome to ZIM's second quarter 2025 Financial Results Conference Call. Joining me on the call today are Eli Glickman, ZIM's President and CEO, and Xavier Despleaux, ZIM's CFO. Before we begin, I would like to remind you that during the course of this call, we will make forward-looking statements regarding expectations, predictions, projections, or future events or results. We believe that our expectations and assumptions are reasonable. We wish to caution you that such statements reflect only the company's current expectations and that actual events or results may differ, including materially. You are kindly referred to consider the risk factors and cautionary language described in the documents the company filed with the Securities and Exchange Commission, including our 2024 annual report on Form 20F filed with the SEC on March 12, 2025. We undertake no obligation to update these forward-looking statements. At this time, I would like to turn the call over to ZIM CEO, Eli Glickman. Eli?

Thank you, Ilana, and welcome, everyone. Thank you for joining us today. Despite severe market disruption and volatility, mainly due to American tariff announcements, we leverage our transformed fleet and improved cost structure in Q2 to mitigate negative effects. Slide number four. We generated revenue of $1.6 billion and net income of $24 million. Q2 adjusted EBITDA was $472 million and adjusted EBIT was $149 million. We suggested EBITDA margin of 29% and adjusted EBIT margin of 9%. We maintain total liquidity of $2.9 billion at June 30th, having paid approximately $470 million in dividends in the second quarter. Slide number five. Per our dividend policy to distribute 30% of quarterly net income, our Board of Directors has declared a dividend of $0.06 per share of a total of $7 million based on Q2 results. Despite the considerable uncertainty given our performance today, we are revising our full year guidance ranges. We are raising the lower end of our full year guidance such that we expect to generate adjusted EBITDA between $1.8 billion to $2.2 billion and adjust EBIT between $550 million and $950 million. Xavier, our CFO, will provide additional context and our underlying assumptions for our 2025 guidance later on the call. Slide number six. While it has been an unpredictable 2025 so far with wide swims in freight rates, we are confident in our competitive position in the industry and believe Zim is well positioned to navigate turbulent periods like the one we are in today. this trend lies in our modern competitive fleet and agile commercial strategy and we will remain proactive responding to changes in demand across our global trade lanes we have adapted our trans-pacific network to account for the changes in the cargo flow following the various tariff announcement since april we first rearrange We first rearrange our Trans-Pacific Network to address the sharp decline in cargo from China to the US and parallel improvement in cargo flow from other Southeast Asian markets. And later, we reinstate capacity to China after the spike in demand following the tariff suspension announcement in May. As we have previously discussed, we aim to build a strong commercial presence in key market in which we operate and diversify our geographic footprint to enhance our business resilience. Accordingly, Zim has worked to expand and diversify its network to both mirror changes in trade flows to the US as well as increase our exposure to trade from China to diverse and markets beyond the United States. Our expanded presence in Southeast Asia, especially in Vietnam and Thailand, align with region's rise as manufacturing hub for the U.S. and globally. Zim's strong and growing position in this market will enable us to capitalize on the expected continued growth in these trades. During the second quarter, this presence in Southeast Asia served as an advantage, enabling us to partially mitigate the impact of reduced cargo flows from China. Nevertheless, the incremental volume from Southeast Asia was not sufficient to fully offset the shortfall, as reflected in our overall carried volume for the period. The surge in Trans-Pacific demand we experienced in May was short lived and current demand on this trade continues to be relatively weak. Furthermore, due to ongoing uncertainty regarding tariffs between the US and China and based on our current feasibility, we did not anticipate a strong peak season this year. As a supply that was previously withdrawn from the Trans-Pacific has been reinstated, we also anticipate continued pressure on freight rates during the second half of 2025. In light of this development, We are pleased with our growing presence in Latin America, where we saw 10% volume growth year-over-year. Zines tend to benefit from growing trade between Latin American countries and both the US and China. In addition to growing geographic diversification, our operational excellence remains a core strength. We operate today a modern and competitive fleet that is highly suited to the trades where we currently operate, and we continue to focus on ensuring access to the right capacity. Following a transition period from 23 to 2024, during which we had 46 new built vessels delivered to us, we entered 25 with transformed fleet, significantly improving our cost structure and the efficiency of our operated capacity tends to larger, more modern vessels. Moving forward, Our objective is to maintain and further enhance our competitive position while capitalizing on attractive opportunities that will ensure our fleet remains modern and cost-effective. In April, we announced new long-term chartering agreement for 10,000-11,500 TULNG dual-fuel vessels that will be delivered in 2027 and 2028. Not only in this versatile capacity ideally suited for ZIM's various global trades, but it will also further strengthen our core LNG fleet, which is a critical commercial differentiator. In the future, we see significant values as operators of LNG tonnage and customers increasingly seek eco-friendly shipping solutions. We also view it as imperative that ZIM maintains some degree of flexibility at all times to act dynamically and reshuffle vessel capacity based on market demand. We recognize that the market realities of today may be different than the realities of tomorrow. We implement the same agility operationally, aligning our operating capacity with the shifting dynamics of the trending environment. This year, we regain this important optionality with respect to our fleet size and have re-delivered charter capacity. Xavier will discuss our current fleet profile in more detail. Overall, market fundamentals still point to supply growth outpacing demand moving forward. However, as we have seen, the rate environment can be volatile and unpredictable. even by a range of factors impacting global trade and economic expectations. In the face of such uncertainty, our focus is controlling what we can to position ZIM for sustainable and profitable growth. We are confident that our commitment to excellence and our agility will serve us well and we continue to take steps forward to further enhance business resilience, both commercially and operationally. On this note, I will turn the call over to Xavier, our CFO, for a more detailed discussion for financial results, 2025 guidance, as well as additional comments on the market environment. Xavier, please.

Thank you, Ellie. And again, on my behalf, welcome to everyone. Slide seven, we present our key financial and operational highlights. Second quarter revenues were $1.6 billion, down 15% compared to last year, reflecting lower freight rates and lower volume. Total revenues in the first half of 2025 of 3.6 billion were up 147 million. or 4% year-over-year. Our average freight rate per TEU in the second quarter was $1,479 compared to $1,674 per TEU in the second quarter of last year. Q2 carried volumes of 895,000 TEUs, was 6% lower year-over-year due to the disruption in the market that Ellie already referred to. Revenue from non-containerized cargo, which reflects mostly our car carrier services, totaled $111 million for the quarter, compared to $128 million in the second quarter of 2024. Our free cash flow in the second quarter totaled $426 million, compared to $712 million in the second quarter of 2024. Turning to our balance sheet, total debt decreased by $115 million since prior year end. As previously noted, total debt is expected to trend down as repayment of lease liabilities exceeds lease additions and extensions until we start receiving new build charter capacity in the second half of 2026. Next, the following slide provides an overview of our fleet. While Eli has already addressed a few key elements of our fleet strategy, I'd like to expand on his comments and share additional data points that we believe are important to consider. Steam currently operates 123 container ships with a total capacity of 767,000 TEUs. Two-thirds of this capacity comes from the 46 new-built vessels received during 2023 and 2024, which carry durations in terms of charter from 5 to 12 years, and also another 16 vessels that are owned by Zinn. To remind you, we opted to secure our new build capacity on long-term contracts rather than continue to rely on the short-term charter market. By doing so, we ensured access to vessel sizes better suited to the trades in which we operate, which are not available on the charter market, thereby improving our competitive position. The longer term charter periods also contribute to a better predictability in our cost structure. Moreover, for 25 of the 28 energy vessels, our core strategic capacity, we hold options to extend the charter period as well as purchase options, giving us full control over the destiny of these vessels, very much as if we were the vessel owners. We have a similar option to purchase the 10 11,500 TEU LNG vessels we recently committed to at the end of the charter period. The remaining one third, or 250,000 TEUs, allows us to maintain important flexibility. At the end of 2026, there will be a total of 34 vessels up for charter renewal. with 12 vessels or 64,000 TEUs still up for renewal in 2025 and 22 vessels or 70,000 TEUs in 2026. Its optionality to keep the capacity or we deliver to owners allows them to adjust its capacity according to changing market conditions or shifts in our commercial strategy. With respect to our car carrier capacity, we currently operate 14 vessels. Having recently, we delivered another car carrier. The car carrier industry has also been under some pressure given supply growth and the introduction of new tariffs on Chinese electric vehicles by both the US and the European Union. While ZIN expanded its car carrier capacity in the past few years up to 16 car carriers last year to benefit from favorable market trends, we do not have long-term commitments on our chartered capacity. and we are prepared to adjust our participation if market dynamics change. Moving on to slide number nine, we present Zim's second quarter and six months 2025 financial results compared to last year Q2 and last year's first half. Adjusted EBITDA in this year's second quarter was $472 million and adjusted EBIT was $149 million. Adjusted EBITDA and EBIT margins for the second quarter were 29% and 9% respectively, to be compared to 40% and 25% in the second quarter of last year. For the first six months of 2025, adjusted EBITDA margin was 34% and adjusted EBIT margin was 17%. This is compared to 34% and 19% in 2024. Net income in the second quarter was $24 million compared to $373 million in the same quarter of last year. Next, on slide 10, you see we carried 895,000 TEUs in the second quarter compared to 952,000 TEUs during the same period last year. That is a 6% decline. This decline was mainly attributable to weak transpacific demand driven by tariff-related disruptions, as volume from other Southeast Asian markets were insufficient to offset the reduction in cargo from China. In Latin America, on the other hand, we continued to see growth 10% year-over-year in the second quarter. Next, we present our cash flow bridge. For the quarter, our adjusted EBITDA of $472 million converted into $441 million net cash generated from operating activities. Other cash flow items for the quarter included dividend payments of $471 million and $470 million of debt service, mostly related to our lease liability repayments. Moving now to our 2025 guidance, we have raised the lower end of our guidance range and now expect to generate adjusted EBITDA between $1.8 billion and $2.2 billion and adjusted EBIT between $550 million and $950 million. With the second half still expected to lag the first half. We have narrowed ranges reflective of our performance year to date Note the continued high degree of uncertainty related to global trade and the geopolitical environment. Our view on freight rates and operating capacity is unchanged as compared to our guidance assumption for March and May. We expect freight rates on a full year basis to be significantly lower in 2025 when compared to the ones of 2024. with average freight rates in the remainder of 2025 lower than the first half average. Also, our view remains that sailing through the Red Sea will not resume this year, continuing to absorb significant capacity. We assume that we will maintain similar operating capacity on average to the one of 2024 over the course of the year, as we renew some of the existing capacity or similar tonnage. Given our exposure to the Trans-Pacific and weaker outlook for the remainder of 2025, we revisited our volume growth assumptions again and now assume flat volume year over year compared to 2024. Finally, as for our bunker cost, we expect slightly lower cost per ton in 2025 when compared to 2024. Now, before opening the call to questions, a few more comments on the market dynamics. The supply-demand balance previously used as an indicator for market expectations appears to be a less effective predictor. On the supply side, rerouting around the Cape of Good Hope continues to absorb substantial capacity, while congestion also remains a factor influencing effective supply. Despite notable increases in supply, 10% in 2024 and an additional 6% expected for the full year of 2025, scrapping has been minimal for several years. Idle capacity has stayed low, below 1%, for the past 18 months, and the charter market has remained relatively strong. Demand, particularly on the Trans-Pacific, on the other hand, has been greatly impacted, both positively and negatively, by uncertainty with respect to American tariff. Beginning in late 2024, in response to an anticipated higher US tariff, demand was strong entering into 2025. We've already discussed the effect of shifting tariff decisions throughout April and May on our Trans-Pacific cargo flow. On a positive note, inventory levels, which are available up to June, remained relatively stable throughout 2025, suggesting that the strong demand we experienced from late 2024 into early 2025 did not result in significant inventory buildup. Recently, new trade agreements have been announced between the US and several significant trading partners, including the European Union, Japan, Korea, and Vietnam. resulting in higher overall tariffs on products entering the US. The long-term impact of these changes is not yet clear. Additionally, a trade agreement between the US and China has not been reached, contributing to ongoing uncertainty that complicates planning for US importers and for carriers to forecast demand, particularly beyond the third quarter. Frequent tariff announcement and the introduction of unusually high tariffs, as seen in recent announcements regarding India and Brazil for various reasons, have also introduced further unpredictability. It is important to note that Zim, or any other carrier for that matter, need not be active in a particular trade to be impacted by these tariff decisions, as container shipping works as a global network. if tariffs undermine a particular trade in the long term the resulting network adjustment can create over capacity on other trades and on that note we will open the call to questions thank you thank you we will now begin the question and answer session if you would like to ask a question please press star 1 on your telephone keypad to raise your hand and join the queue if you would like to withdraw your question simply press star 1 again

Your first question comes from the line of Omar Nocta from Jefferies. Your line is open.

Thank you. Hi, Ellie and Xavier. Thanks for the update. A couple of questions from my side and maybe just first on the volume discussion you were just highlighting. Obviously, you're expecting flat volumes for the year, which implies the second half is going to be down year on year. And I wanted to just check with you. Is this expectation driven by your views on the market itself being down in the second half? Or is it driven by maybe a pullback on the part of Zim, given some of your vessels are rolling off charter and you don't plan to renew them?

Hi, Omar. It's a little bit of both. I think first, when we compare year-over-year 2024 versus 2025 for the second half, we benefited last year from a very strong volume growth, if you remember. A quarter of a quarter, we beat records in Q3 and also in Q4 from a carried quantity perspective. This year, we will operate a similar type of overall effective capacity in terms of TEU that we deploy on the various trades where we operate. But it is to be said that the peak season in Q3 is somewhat expected to be not as strong as what we experienced last year. And so that is, I think, why we don't believe that we are going to renew beating our record in terms of carried quantity into the second half. We still believe that we are going to hopefully come back to higher volume sequentially. So Q2 has been a little bit of a weaker quarter from that perspective for the reasons we talked about and the reshuffling of our capacity as a result of the change in the US tariff discussions between the US and China that impacted us, give or take 50,000 TUs. So, in Q3, we expect that if we are to operate in a stable environment, we will recover that volume. Whether we're going to beat last year is less likely.

Okay, thank you. And I guess from, you know, clearly the market can be very volatile and you mentioned, you know, how the current market dynamics are in your commentary. I guess what's your best guess if you were to think about the business over the next 18 months? You have the 34 shifts that are up for renewal between now and the end of 26. If you don't get a change in the market dynamic, what portion do you think of those 34 would you look to renew?

That's an interesting question, an important one. What is very important to us is that what we label as our core capacity, which mostly relates to the large capacity vessels, going back to those 46 ships that we ordered and got delivered to us in 23-24, we know that this is the capacity that we need in the longer term and that we will continue to operate in the longer term. So that's, you know, with the capacity that we own, that's two-thirds of the capacity that we operate today. And yes, we have give or take 250,000 TEUs today of capacity, this 34 shift that you were referring to, that will come up in terms of a charter period for possible renewal between now and the end of next year. And clearly, those shifts will act as variable for us to navigate the market conditions. And if the market is continuing to deteriorate, more likely than not, we will let go more of the shifts than we will recharter. And if this is to be a different story, then we will recharter. But back to your question, I think if the market is trending down meaningfully into 2026, chances are that we will end up downsizing as opposed to renewing those vessels.

Okay. Thank you, Xavier. And one final one for me, and I'll turn it over. Elie had mentioned the capacity and the trans-Pacific that's been reinstated. And then they have it in combination with the muted peak season that kept rates depressed. Why would you say that the capacity influx that we did see, why has that not been rerouted? And when would you expect to see that start to kind of shift away from the market, given the market remains fairly soft on the Trans-Pacific?

That's an interesting question. I think when we look still ahead of us for Q3, Q4, from a volume perspective, even though we may not beat our last year volume in terms of carried quantities, we still anticipate quite a robust volume in the second half. And that also obviously applies to our expectation on the Trans-Pacific. I think there is also, and you're no stranger to the fact that the alliances have been reshuffled a little bit into earlier this year. And so the network and the various partners and the various alliances also got into the initial year of working together. So that also, I think, plays a little bit in favor of maybe less agility in terms of managing capacity. But that may change.

Great. Thank you a lot. I'll pass it back.

Your next question comes from a line of Alexia Degani from JP Morgan. Your line is open.

Yeah, thanks for taking my question. Two questions, please. Just firstly, when we look at the third quarter, is there any kind of timing effect of the exit rate from the high June spot rates that will benefit you? And do you have kind of a sense of that already? And then, when you look at your deployed capacity, I understand the number of vessels have come down year over year, but these are larger vessels. So in fact, in the second quarter, you actually increased capacity quite substantially. And yet volumes were also down quite substantially. When we look at the second half, I'm estimating that you will still grow capacity year over year based on your average deployed capacity last year. Should we expect the load factors to continue to erode therefore, or are you taking more near-term action now? And then just to follow up on the previous question, I think you talked about 250,000 TEUs that could be uh up for renewal in the next um 18 months but on the slide i only get 140. what am i missing please thanks

So first on your question with respect to the timing effect, I think you're correct. When we look at what has happened in this first half, the tariff effect of April, you may remember on the 9th of April, the tariff were hiked to 145% for import of cargo from China to the US. And as a result of that, what happened, we saw pretty much overnight the export or the bookings out of China take a nosedive. And what we did is change the capacity and And as a result, we lost the volume that we just talked about during the prior question. But then what happened is when in May, mid-May, the 90-day pause was introduced, what we saw is a very sharp rebound in demand. All the indeed the importers in the US trying to benefit from this window of opportunity to to scale back up their inventories. And that also came with a nice increase in the spot rate, spot market, to which Zim are significantly exposed. But so when it comes to revenue recognition perspective, you remember maybe that as per the accounting rules, we recognize revenue based on the prorata temporis, so over the duration of the voyage. So the surge in the rates that we experienced towards the second half of the second quarter, at the end of the day, we're only partially recorded in our second quarter, and some of those voyages and the bill of ladings will find their way in our financial statements to the third quarter. Hence why maybe if you look at our Q2 performance and you also put that in parallel with the guidance that we just re-communicated, there might be a calendarization of that peak effect that we saw in terms of a spot market happening in Q2 over a very short time frame. It went up and down quite fast. So yes, there is a bit of a time lag that will pour into Q3 on that front. When it comes to the capacity that we will deploy in the second half of this year, I think when compared to last year, I wouldn't say that there is going to be or we should expect a significant difference in terms of operated TEU. By the time you know over december 2024 we had received the most of our almost all but one of the 46 ships that we had on order if i remember well we closed 2024 operating 782 000 tus of capacity we operate today 760 000 tu so i think it's going to be a pretty much like for like And with respect to your last question of clarification when it comes to the TEUs, maybe I wasn't clear, we have 250,000 TEUs that are subject to a short-term charter. We define short-term charter by less than five years, in a way. And what you have, 140, is what relates to 2025 and 2026. expiration date. The rest is beyond 2026 to go back to your 250.

Thank you, Javier. And can I just ask one more, if I may? In terms of the cost structure of the whole industry, you know, we've heard from Hapag-Lloyd, Maersk, that unit costs are materially above the pandemic levels. Can you give us an indication of your break-even unit cost level? And I guess if we think about the 2Q, did you incur any operating losses at the start of the quarter versus the end of the quarter? Thanks.

Look, I think when we are considering our cost structure, it is clear that cost went up in terms of moving a box today compared to what was the prevailing cost structure, I think maybe pre-COVID you were asking, Alexia. I mean, if we look at pre-COVID, for example, we were bunkering the ships on the HFO. Then since then, we transitioned to LSFO in itself. This is a cost increase. If we look at the new building price, as I'm sure you've seen as well, they went up. And as a result is where the chartering rates went up. So the cost of securing tonnage has also gone up compared to a prior period. I think also when we look on the variable component aspect of things, the cargo handling charge also went up. If we look at the US and you're no stranger to the discussions and the agreement that was reached between the various terminals in the U.S. East Coast and first in the West Coast and then in the East Coast with the unions. So that triggered an increase in salaries that is reflected then at the end of the day in an increase passed on to the carriers when it comes to paying for loading or discharging a box. So all those elements of additional costs found their way in, I think, our cost structure, which, yes, do contribute to increasing the overall cost that you carry. And then you add to that something that is maybe more linked to the congestion that we are experiencing today compared to what was the situation maybe, again, pre-COVID. There are more and more ships underwater, maybe the Terminal capacity did not grow at the same pace. We need to put more ships in order to maintain weekly service. To give you an example, our main Asia to the US East Coast, our ZCP line, we used to operate that line on a weekly basis with 10 ships pre-COVID. Now we need 12 in order to maintain the weekly schedule. So, yes, I would say that overall, the cost structure of the industry and of ZIM has gone up when compared to pre-COVID levels.

Again, if you'd like to ask a question, press star 1 in your telephone keypad. Your next question comes from the line of Chloe Fu from Citi. Your line is open.

Hi, thank you for your presentation and thank you for taking my questions. My first question is also on the cost. So you have mentioned that you have an improved cost structure in Q2 and you aim for a sustainable growth in this highly uncertain market. Can you elaborate on what have you done in terms of cost in Q2 and what are some further cost improvement plans And since you have also talked about what the part of cost that is more difficult to decrease, such as cargo handling, I'm just interested to know which part of cost can you improve? And my second question is on freight freight in H2. So a normal seasonality suggests that peak season is mostly done at the stage of now. and freight rates should trend lower from here to end of year. Do you think that the same pattern will happen this year, or do you believe there is something that will be different? Thank you.

Thank you, Chloe. Maybe addressing your second question to start with from a rate dynamic perspective. Yes, there are, I think, clouds on the horizon with all the element of uncertainty that we talked before. The fact also that some of the shippers in the US did anticipate a little bit the peak season, and then we don't expect, as I think we stated, a stronger peak season ahead of us. and maybe the bulk of it is already behind us. So we don't anticipate that we will not be able to utilize our capacity, but there might be a little bit of a weaker sentiment from a seasonality perspective when it comes to volume for Q3 and Q4, and as a result, If there is no stronger demand from a seasonality perspective, then this is not a good indicator to support the freight rate. So we'll see what happens on that front. But it is a risk that we think we are highlighting, especially with respect to the latter part of the year, Q4. With respect to the cost structure, I think when we talk about the initiatives that we are entertaining on a quarter-over-quarter basis, to name a few, I think first we continue to benefit from the scaling up of our average vessel size. Just to illustrate with the new build capacity that we received in 23 and in 24, and now we are operating on a full year basis in 2025, the average vessel size went up by 50% when compared to the average vessel size that we were operating back in 2022. And as you know, by scaling up, we reduce our cost of moving a box, providing again that we can maximize the utilization. The second element for me maybe to emphasize is the transition that we embarked on shifting away from LSFO and increasing our lng conversion so today 40 of the capacity that we operate runs on the lng we have secured as well good good access to supply for the trades where we operate and this transition from lower sulfur fuel oil to LNG also contributes to reducing our cost of operation. Third, I would say that we are also continuing to leverage the partnership that we entered into with MSC in February, following the the change in the 2M alliance. And that is also for us a continuation of maintaining the cost down, offering a wide range of service to our customers. Four, I think what we are also considering is reducing the imbalance between our trades. This is a hidden cost, but trying to avoid to the maximum extent possible repositioning of empties. And that is also a commercial attention that we put on that to maximize the weak leg in terms of loading. And finally, I think I would point to our digital initiatives. We've been quite active on that front, both in terms of developing tools to assist us to be better, to anticipate better, to price better, and also active in proposing to our customers an easier way to deal with us and hopefully potentially capturing additional volume from the competition.

That's clear. Thank you. And that concludes our question and answer session. I will now turn the call back over to Mr. Glickman for some final closing remarks.

Thank you. To conclude, while 2025 has so far been marked by significant volatility and wide swings in the freight rates, we remain confident in ZIM's ability to navigate this turbulent environment. Our modern upscale fleet of cost-efficient vessels, as well as our agile commercial strategy, position ZIM well to continue to respond quickly to changes in the market, in demand, and across our global trade lens. As we have demonstrated time and again, we will remain proactive, relining our network, redeploying capacity, and capitalizing our growth opportunities as market conditions evolve. We believe our disciplined, nimble approach combined with a commitment to operational efficiency and strong balance sheet will enable ZIM to manage through the current period of uncertainty and emerge even stronger over the long run. Based on our performance to date, we've increased the midpoints for 2025 guidance regions, ranges, intend to draw on our transform fleet and improve cost structure to continue to create value for our shareholders even in the face of challenging market dynamics thank you again for joining us today we look forward to sharing our continuing progress with you all thank you this concludes today's conference call thank you for your participation you may now