ENCE Energía y Celulosa, S.A.

Good afternoon, ladies and gentlemen. Welcome to the ENSYS second quarter 2020 results presentation. I now hand over to Mr. Ignacio Colmenares, Executive Chairman, and Alfredo Avello, CFO. Gentlemen, please go ahead.

Good afternoon, ladies and gentlemen. Thank you for joining ENSYS first half 2020 results conference call. Our CFO, Alfredo Avello, and our head of IR, Alberto Valdez, are also connected. After the presentation, we will be pleased to answer any questions you may have. Let's start in slide number four with the main highlight of the quarter, which has been marked by the international spread of the coronavirus. I'm proud to tell you that our early reaction to the threat from this virus on February 24th and the rigorous application of our protocols to prevent and minimize the risks of the spread of the virus have allowed us to keep our people safe and to continue to operate. All ENFES activities, from forestry and biomass operations to part production and the generation of renewable energy, were classified as essential and have therefore continued during this health crisis. Our first health results show a strong operating improvement in both businesses. following the strategic plan investments made last year, and despite the difficulties caused by the pandemic. Firstly, our renewable energy sales increased by more than 50% in the second quarter, following the commissioning of two new biomass plants in first quarter 20. Secondly, our power production increased by 12% in the first half of the year, and cash cost was reduced by 5%. Pulse sales improved by 19% year on year with a better commercial mix. Despite this operational improvement, first half financial results continue to be affected by the low pulse and electricity prices with an EBITDA of 9 million in the pulse business and 27 million in the renewable energy business. Pulse prices remain at the minimum of the last 10 years. due to the temporary imbalance resulting from the lockdown measures implemented worldwide during the second quarter. In order to ensure the resilience of our business in any scenario, we have increased our liquidity by 51%, up to 342 million. Remember that our two businesses enjoy long-term financing with no relevant maturities in the next two years, and with no cabinet in the PALP business. Our top priority now is the health and safety of our staff, the continuity of our operations, and the reduction of costs and leverage in the PALP business. Moving now to slide five, we can see some of the early measures we took against the coronavirus and which have proven to be effective preventing the spread of the virus in our workplaces and enabling us to the continuity of our operations. We boosted teleworking in our functions wherever possible and in all cases of particularly sensitive people. We also reduced onsite work to the minimum. Shifts were adapted. Isolated work teams were appointed for each process and replacement teams were organized to remain in preventive quarantine at their homes. Annual maintenance shutdowns have been delayed to the third quarter. We have successfully applied our prevention protocol since February 24th throughout our organization, including subcontractors and logistic services. This protocol has been periodically updated with best practices and more as more became known about this pandemic. We continuously monitor the evolution of the pandemic. Since the end of June, we are progressively returning to our workplaces. Sixty percent of those who were teleworking are already back. Our reactive action protocols are implemented whenever new outbreaks occur in areas near our workplaces. we have also taken measures to reinforce our liquidity. Firstly, we have drawn the revolving credit facility of 70 million in the PAL business, maturing in March 2020. Secondly, we have closed long-term backup credit facilities with no cabinets for an additional 67 million. Thirdly, we have pushed back to next year CAPEX payments for an amount of 37 million. And finally, we continue to optimize the use of our factoring and confirming lines. Moving now to slide number six, I would like to mention the highlights of our sustainability performance. Last year, we defined our sustainability plan, which constitutes our roadmap to excel in sustainability and create value for all our stakeholders. Companies that care for the environment, for the staff and for the communities, companies with a strong corporate governance, and companies which are also more efficient, more flexible, and more competitive in the long run. ENCE is at the forefront in circular economy, sustainable forestry, social commitment, and gender equality. Our best practices are being recognized by independent ECG analysts, such as Sustained Analytics. In the last assessment, ENCE attained a total score of 80 points, placing us as leaders in our industry. In addition to all the measures that we implemented to protect the health of our staff during the first half, I would like to highlight, firstly, the successful development of our differentiated and more sustainable products, which already account for 10% of our power sales. Secondly, the 41% year-on-year reduction in the auto impact of our Navia BioMeal to 1.5 minutes per day. Thirdly, we continue to reduce water consumption levels in Navia and Pontevedra year after year. And last but not least, we have substantially reduced NOx and SO2 emissions in our biomass plants at Mérida, Jaén and Ciudad Real. Moving now to slide seven and our renewable energy business. We commissioned two new biomass power plants in Huelva on January 31st and in Ciudad Real on March 31st. Our renewable energy sales increased by 51% year-on-year in the second quarter despite the difficulties caused by the pandemic. The scheduled ramp up of our two new biomass power plants and the fine tuning of equipment was delayed by the mobility restrictions and the absence of external technicians caused by the pandemic. The repair in Germany of the turbine of Welbach 41 megawatt power plant is already taking three months longer than expected, also due to the pandemic. We now expect to generate 1.4 gigawatts this year, 34% more than in 2019. This regulated business is adding stability to the group, as you can see in the following slide number eight. Our renewable energy sales price is supported by its regulated minimum. It has declined by just 7% from its regulatory cap to its regulatory floor, compared to a 44% drop in the market energy price. Additionally, the regulated annual return on investment of our power plants was confirmed at 7.4% for the next 12 years. This implies an annual amount of 63 million with no costs and subject to a minimum operation of just 3,000 hours per power plant. The next slide, number nine, illustrates our renewable energy pipeline. Firstly, we have eight new projects with a combined installed capacity of 405 megawatts. All of them already have grid connection permits and location security. Administrative authorization are being processed. We expect the public options required to implement the National Renewable Energy Plan before Christmas. We expect to begin the construction between the third quarter 2021 and the first quarter 2022. In addition, we have other projects at an early stage of development. Turning now to the pulp business in slide number 10, we have recorded a strong operating improvement in the first half of 2020, following the 100,000 ton capacity increase carried out in 2019. Our pulp production increased by 12%. The lower transformation costs resulting from this capacity increase, together with lower corporate expenses and wood costs, has enabled us to reduce our cash costs by 5% compared to the first half last year. This production increase was achieved despite the difficulties caused by the pandemic. Foreign technicians required to commission the new part dryer and digester in Navia and the new turbine in Pontevedra were unable to work in Spain. We have delayed our annual maintenance shutdowns at both biomills to the third quarter due to mobility restrictions during the health crisis and to minimize the risks for our staff. The delays caused by the lockdown could entail a slight adjustment to our initial production target up to 2% and a minimum adjustment to our initial cash cost target up to 1%. Our part sales improved 19% year on year with a better commercial mix, as you can see in the following slide number 11. Almost all of them went to the European market where ENCE has significant logistical and service advantages. More than half went to the growing tissue market. Our differentiated products, which are more sustainable and are better adapted to replace softwood pulp in specialty segments already account for 10% of pulp sales. In the following slide, number 12, we can see the evolution of global pulp shipments and pulp producers inventories over the last five years. Global pulp demand recovered by 8% compared to the first five months of 2019. which was affected by the restocking of pulp in the paper industry. Its restocking in the first quarter, together with higher demand for tissue paper and hygiene products, has offset lower demand for printing and writing papers, particularly during the lockdown. The spread of the coronavirus has forced pulp producers to postpone maintenance shutdowns to the second half of 2020. together with the impact of lockdown measures, has caused a slight upturn in producers' inventories since the beginning of the year. As you can see in the following slide, number 13, pulp prices have remained at the minimum level over the last 10 years. These prices have remained below the cash cost of many pulp producers for three quarters, even worse. they have remained below the free cash flow break-even point of most PAL producers for three quarters. This situation is unsustainable for most of the industry, and we have started to see some market-related downtimes of high-cost mills. In our case, our free cash flow break-even point, including recurrent capex and financial expenses, is $440 per tonne. which is below current market prices. In slide number 14, we summarize our views on pulp supply and demand. Our demand could decrease this year due to the impact of the lockdown measures, particularly on printing and writing paper consumption for as long as schools and offices are closed. We expect demand for tissue and hygiene products to remain strong during the second half of the year while demand weakness for printing and writing will gradually fade as economic activity recovers. Park prices should start recovering after the summer supported by printing and writing demand recovery and by annual shutdowns. In the longer term, park demand will surely outgrow supply. Urban population growth and improving living standards in emerging countries together with increasing plastic substitution will continue to support park demand growth. On the supply side, there are only two major paper grade park projects being executed, Araucos Mapa and the UPM project in Uruguay. Let's continue in slide number 15 with a summary of our first half financial results. Pulp business EBITDA reached 9 million. Renewable business EBITDA reached 27 million. Lower pulp and electricity prices complicate the comparison with the same period last year, despite their stronger operating performance. Turning to slide number 16, you will find the main cash flow components and our net debt position at the end of the period. Free cash flow before growth capex and dividend payments amounted to 29 million, while carryover payments from investments implemented in 2019 amounted to 42 million. The group's net debt increased by 27 million, up to 540 million, including 55 million related to lease contracts. It is important to highlight once more that our two businesses enjoy long-term financing with no relevant maturities in the next two years and without any covenant in the part business. And that our cash balance at the end of the quarter amounted to 342 million. Finally, let's look at slide 17 concerning Pontevedra's biomeet concession. We have been expecting a first ruling by the national court in the next few months. that this could be delayed until the end of the year due to the coronavirus. I will now invite Alfredo to review the financial figures in more detail.

Thank you, Ignacio. Let me start with our PAL business results, which you will find in slide 19. PAL sales increased by 19% year on year, up to 520,000 tons, thanks to the higher production levels achieved. after the capacity expansions carried out in 2019. During the second quarter, these increases were some lower due to the inventory buildup ahead of our annual maintenance shutdowns planned for the third quarter. As our chairman has previously explained, the higher fixed-cost dilution derived from the capacity increases, together with lower corporate expenses and wood costs, allowed us to reduce our cash costs by 5% down to 378 euros per ton compared to the first half of 2019. On the other hand, and in line with a sharp drop in the reference price, our average sales net bulk price decreased by 29%, resulting in an EBITDA of 9 million euros. This figure includes negative effect settlements of 9 in the first half compared to the 15 million euros recorded in the same period last year. Moving forward onto the Pulse Business P&L in the next slide. After ABDA, depreciation amounted to 34 million euros. This figure represents a 15% increase driven firstly by the biomass capacity expansion investments carried out in 2019, and secondly, by a larger wood depletion figure mainly related on the higher wood sales coming from our southern plantations under our long-term contracts signed at the end of 2018. Next to the right, we show the recording of the provisions for 2.5 million related to ENFES Environmental Pact in Ponte Vedra, with no cash outflow effect. All these resulting in a negative EBIT figure of 27 million for the period. Finally, the negative financial results for 5 million, together with a positive tax effect of 8, added up to a net result of minus 24 for the first half of 2020. If we continue to slide 21, we can analyze our appalled business cash flow generation. Normalized free cash flow after working capital changes, maintenance capex, financial payments, and taxes attained 13 million euros, which after the carryover capex payments coming from 2019 investments, resulted in a free cash flow figure of minus 15 for the period. As our chairman highlighted earlier, we continue actively managing our cash outflows related to these carryovers, both postponing some of them into next year and canceling some others not yet incurred. Up to today, we have postponed carryover payments in the Pulse business amounting to $35 million, and we have reduced other investments by another five. As a result of this, our initial CAPEX payment guidance of 115 million years for 2020 is now reduced by 40 million down to 75, including maintenance CAPEX. Let me update you now on our ongoing FX hedging program in slide 22. As we mentioned in the first quarter's result presentation, we have returned to our standard policy consisting on hedging 50% of our PAL business sales using average cycle prices and limiting the period to 12 months. This program had a negative impact of 9 million in the first half of the year compared to 15 in the same period last year. If the U.S. euro exchange rate remained an average of 1.14 in 2020, the full year impact in our P&L should total approximately 10 million euros. If we continue to slide 23, you will find our PAL business balance sheet. Net debt increased only by 16 million during the first half up to 322, including 46 million related to IFRS 16. At the same time, cash imbalance increased by 128 million, reaching 234 at the end of the period in this business. Within our plans to maximize liquidity, and help shielding our operations against any adverse scenario in the framework of this pandemic. We have firstly drew down our evolving credit facility of 70 million and expanded our long-term backup credit facilities by another 67. Secondly, and as we previously said, we have negotiated the postponement to 2021 of carryover payments amounting 35 million and reduced overinvestments by another five. we are increasing the use of our factoring and confirming lines available. As you already know, this business is government-free and denotes long-term authorities releasing our balance sheet from short-term pressures. The debt to EBITDA ratio in this business is affected by the minimum part prices and the negative EBITDA recorded in 4Q19 due to NAVYAS storing energy shutdown. Let's now focus on the renewable energy business in slide 24. The energy volume sold increased by 27% in the first half of the year, thanks to the contribution of our two new biomass plants commissioned in the first quarter, and despite the delay caused by this pandemic. To the real 16 megawatt biomass plants performed well after the repowering work carried out in the first quarter, which couples with the enhancement performance of our well above 50 megawatt and high-end 60 megawatt biomass plants, following the repowering last year. On the other hand, as we mentioned in the first quarter results presentation, our Worldwide 41 megawatt biomass plant suffered a failure in this turbine in March. Its repair in Germany has been delayed due to the pandemic, and we expect to resume operations very shortly. Regarding prices, the average selling price in the first quarter was 7% lower in the same period last year. As a consequence, of the fall in the electricity market price. Current market prices are below the floor set by the regulator, and therefore, we have recognized an income of 15 million for the period related to this regulatory fallout. All in all, high energy sales increased by our EBITDA by 5%, up to 27 million, offsetting the decline in the average sales price. In slide 25, you can find the breakdown of our renewable energy business P&L. In OABDA, the depreciation and others column increased by 60% up to $22 million as a result of the commissioning of the two new biomass plants, together with the transfer of the remaining assets from the pulp business to the renewable business in Huelva during the first quarter. Net financial cost of $8 million implied a 14% reduction compared to first half 2019, which included certain one-off expenses related to the 50 megawatt CSP project financing with maturity in March 2031. Following a 1 million tax income contribution, the attributable net result of the energy business after minorities shows a negative figure of 3 million in the first half of the year compared to a positive balance of 1 in the same period last year. Let's follow the next slide, 26. with our renewable energy business cash flow generation. After taking into consideration changes in capital, maintenance cap tax, interest, and taxes, normalized free cash flow amounted to 16 million euros. Following the 15 million adjustment related to the regulatory quarter, which we will cash in in the future, the strategic plan cap tax figure of 8 million represents pending payments of the two new biomass power plants commissioned in the first quarter of the year. We have also negotiated the postponing into 2021 of certain carryover payments in the energy business amounting to 2 million euros. As a result, our initial capex payment guidance of 50 million for 2020 is now down to 48, including maintenance capex. All these drives our renewable energy free cash flow figure for the period to minus 5. Please note that our royal decree was published in June regulating certain aspects of the pandemic and specifically reviewing the electricity prices of people during this period. We foresee that this review will have an extraordinary positive cash flow impact within this year of approximately 11 million in our energy business, plus another 2 million in our health business. In any case, we need to wait for this final regulation under administrative order that we expect to be released in the coming weeks. Let me conclude this review in slide 27 with our renewable energy business debt situation. Net debt increased by 10 million up to 218 at the end of the period with cash imbalance of 108 million euros. As you can see, this business also enjoys very long-term maturities and ample liquidity. Our financial leverage of multiple of four times will decrease moving forward with the contribution of the two new guidance plans commissioned in Q1. Let me please return the lead of this presentation back to our chairman for the closing remarks.

Thank you, Alfredo. All the early measures taken and the rigorous application of our protocols to prevent and minimize the risk of the spread of the coronavirus are allowing us to keep our staff safe and continue to operate during this health crisis. The capacity expansions we made in 2019 are beginning to bear fruit with a strong operational improvement in the first half. We have delayed our annual maintenance shutdowns to July, to the third quarter, due to mobility restrictions during the health crisis and to minimize the risks of our staff. New biomass plants commissioned in the first quarter are boosting our renewable energy generation. The regulated business is adding stability to the group. 405 megawatts of our pipeline await the upcoming public options of the National Renewable Energy Plan. We have reinforced our liquidity to face any continued adverse scenario. Our two businesses enjoy long-term financing with no relevant maturities in the next two years, and without any covenant in the PAL business. Our top priority now is the health and safety of our staff, the continuity of our operations, and the reduction of costs and leverage in the PAL business. As the schools and offices reopen, demand for printing and writing will increase, and these Buying with annual shutdowns should strengthen prices in second half. Thank you very much. We are now open to any questions you may have.

Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press 01 on your telephone keypad. You will have the opportunity to make all the questions that you might have. In order to keep it as clear as possible, we kindly ask you to make one question at a time instead of stating multiple questions to our speakers. Thank you. The first question comes from Jaime Scribano from Banco Santander. Please go ahead.

Hello. Good afternoon. So two questions from my side. Well, three questions actually. The first one is regarding the sales the volume sales in Q2, which declined 10% quarter on quarter versus Q1 2020. You mentioned that is due to stockpiling ahead of the maintenance you are doing in Q3, but I was wondering also how has been the dynamics from PPPC information, the demand seems to be weaker in May, June. Maybe you can comment on those dynamics. The second question is regarding the factoring.

Sorry, Jaime, if you don't mind, we will go question by question. Okay, perfect. Thank you very much. We are here with a mask, and it's quite difficult to handle this conference like that. Sorry for your comprehension. No problem. We finished first quarter with 43,000 tons. We finished second quarter with 55,000 tons. That's an increase of 12,000 tons. You have to take into account that we already done, just at the beginning of July, the annual shutdown of Pontevedra, and we are now doing the annual shutdown of Navia. That means that we were forced to increase stock by 12,000 tons, diminishing sales, in order to be able to supply our customers during July and August. These annual shutdowns are very complicated in the context we are living today. In Pontevedra, in our budget, it was a shutdown of 15 days. It took us 35 days. We had things isolated in order to prevent any infection. We have normally 1,000 people from all the companies coming to do the annual shutdown. We limited that to 250, but nevertheless, it was 250 people who are not used to all our protocols of safety. And then it was difficult to tell them and to be responsible. And we are now finishing the annual shutdown of Nadia. That means that that is the main reason why we reduce sales and we increase stock by 12,000 tons from 43 to 55,000 tons. Nevertheless, it is true that the demand was buoyant in March, April, and beginning of May. And suddenly, in third week of May, the demand of printing and writing was reduced. Due to the lockdown, due to children not going to school, to many people teleworking and not going to the offices, the consumption of printing and writing paper stopped and many printing and writing bids shut down at the end of May. What is happening today, which is quite important, it has to be confirmed. But what is happening is that those, let's say, six big customers of big printing and writing, they have announced that they already have better demand for September. They have placed firm orders for August. And we think that although the problem of the pandemic is not solved at all, the situation will improve in third and fourth. Thank you, Jaime. Could you ask your second question?

Yes, thank you very much. Very clear, the first one. Yeah, my second question is regarding the guidance you provided in Q1. You have reduced it a little bit in terms of Pulp production, you passed from 1.06 million tons to 1.02, and you have also fine-tuned a little bit the gas cost. So at the beginning, you were expecting 3.75 for the whole – sorry, 3.72 for the whole year, and now 3.75, which surprised me because actually the gas cost in Q2 has been – So, just to understand why have you fine-tuned this?

Thank you, Jaime. You have to understand that we have delayed, as I told you, our annual maintenance shutdowns at both bio-meals to the third quarter, to July, due to mobility restrictions during the health crisis. And these annual shutdowns are going to, are taking longer, 10 days more than expected in Ponte Vedra. And, well, we hope to start on a couple of days in Navia, but let's do if it is right. Then on the first half of the year, we were not able to do the annual shutdowns, which means that the equipment were tired and efficiency and productivity during second quarter have been worse than expected. And on the third quarter, we are suffering longer annual shutdowns than expected. On top of that, We are behind schedule in our optimization plans this year due to the absence of external technicians that were required to commission the new pulver dryer and the new digester in Nadia, as well as a new turbine in Pontevedra. After March 15, any German and Scandinavian technicians disappeared of our mills, and that means that the ramp up took lumber now it's fine but we have lost some volume that we have we are not going to be able to recover during the second half of the year and thus that affected the digester in navia the new dryer in navia and the new turbine in pontevedra remember that we made huge investments on fourth quarter last year okay Do you want me to give more information?

No, no, I think that was good, but yeah, please go ahead.

No, no, no, it's fine. If it is okay, it's okay.

Okay, yeah, and my last question is regarding the working capital. You have done a very good job in controlling the working capital and improving it, and I was wondering if you can give us the figure of factoring and confirming that you have done in order to improve the working capital?

Yes, absolutely. Alfredo will give you the answer, but I think it is in the documents we have published. Alfredo, could you give the figures of increasing factoring and confirming?

Yes, thank you. Thank you, Jaime. We have increased the use of factoring facilities and confirming lines by 40 in the first half. as part of the measures taken, as we said, to maximize the liquidity. Regarding factoring, we have not increased it. Actually, we have decreased it by 4 million since December 19. December 19 figure was 101 million euros, and June 20 has been a little more than 96. And what we have was much more success on the conferment, basically by postponing payments on wood and biomass. December figure was 93 million euros on conferment, and June 20 figure is a little above 136. We have increased here 44. Altogether, plus 44 in conferment, less 40 in factoring, you have the 40 million euros of increase of these facilities.

Okay. Thank you very much.

Thank you very much, Jaime. Next question, please.

Thank you. Ladies and gentlemen, let me remind you again, if you have any comments or questions, please press 01 on your telephone keypad to enter a queue. Thank you. The next question comes from Joao Pinto from JB Capital Markets. Please go ahead.

Hi. Good morning, everyone. Thanks for taking my questions. I have three, if I may. The first one, you adjusted slightly production estimates. Sorry, I have a problem.

Sorry, Joe, I don't understand what you are saying.

And now? You have a problem with the line. Is it better now? Yes. Is it better now?

It is a bit better, yeah. Let's start. Let's try.

Yeah. So, regarding the adjusted production estimate, with information that you have today, do you expect to reach the same number in terms of sales?

Yes, yes, yes. I think that normally we will sell every single ton we are going to produce, yes.

Okay. My second question, regarding a potential minority sale in the energy business, you said in the previous call that it is on hold. However, do you expect to conclude it before investing in new projects?

I have nothing new to comment on this transaction, John. Sorry.

Okay. And my last question, you told us that the stoppage in Pontevedra took 25 days. Can you tell us about Navia?

Well, as I told you, Navia, according to the plan, it's going to be five days. Well, let's see how it does. We are now just on the middle of the shutdown. We are supposed to start in 48 hours. but we have to be sure that we are able to do that. You know, it's very difficult. Okay, but... In Navia, we are very much affected by the outbreaks. The outbreak in Marinha 10 days ago with all our many, many people living there, and the outbreak in Oviedo now, and it's a lot of restriction of people who cannot attend the meal, many subcontractors who cannot attend, then it may take a few days more. You will know that in three, four days.

Very clear. Thank you.

Thank you very much.

Thank you. Ladies and gentlemen, I would like to remind you, if you have any further questions, please press 01 on your telephone keypad. The next question comes from Jaime Scribano from Banco Santander. Please go ahead.

Hi. Just a couple of more questions. I wanted to leave For the rest, but just in case there are no more questions, I will ask two more. One is your outlook. So we are seeing pulp prices in China in the last few months going down, correction. But then in the last few weeks, it seems it's stabilizing. And in general, both Seltri and the Brazilian listed stocks are rebounding a little bit. What is behind this in your opinion? Is it because there is a better outlook in China or what do you think?

Yes, yeah. We have to analyze the reason behind the problems we have in demand and then in prices after April. Remember that first quarter demand was quite strong. Even in March, April, and beginning of May, demand was buoyant. Remember when we launched a price increase, I remember in April. And then, as a result of the lockdowns, schools been closed, offices been closed, people staying at home, and the market of printing and writing collapsed. Nobody is printing A4. Nobody is buying any paper to write. And the supermarkets and the stores are not publishing anything for publicity. Then as even that the coronavirus is not told, as we are moving from lockdown to a different way of living, a lot of people coming back to the offices. And soon, the schools re-opening, the market is going again up. That was happening in China. China is two months in front of us. I remember that in December and January, we were looking what was happening in China. And that's the reason why We started our first coronavirus protocol on February 24th because we were monitoring what was happening in China in terms of healthy and demand from the beginning. And what we are seeing in China is, well, the activity of China is now at 90% of what it used to be. You take any KPA like the coal consumption, oil consumption, electricity consumption, What is happening in China that has the activities coming back to almost the normality, while consumption of printing and writing is going up, and therefore, demand for pulp is going up. And we expect the same to happen in the second half of the year in Europe and in the States, although the outbreaks we are going to suffer. One thing is absolute lockdown, and the other thing is like we are living today, with outbreaks to force a city, to force an area to be locked down, but not the whole country. Thank you.

Okay. Thank you very much. Yeah, and my second question is just a follow-up on the Pontrevedra case, which I know is very difficult to know. But I don't know if there is any news or from your lawyers or when could we have a resolution from the court? Is it something that is imminent in September, or is it something that is going until the end of the year? Just to have a little bit of color on where we are here.

Yeah, we think it will be more at the end of the year than in September, yes.

Okay. Thank you, Jaime. Very good. Thank you. Thank you.

Thank you. Ladies and gentlemen, Let me remind you, if you have any questions, please press 01 on your telephone keypad now. Thank you. Ladies and gentlemen, there are no further questions in the conference call. I give back the floor to Mr. Ignacio Colmenares and Mr. Alfredo Avello. Thank you.

Thank you very much for attending this conference call. I hope that we will meet again in three months' time. with a better situation. Thank you very much. Bye bye.