ENCE Energía y Celulosa, S.A.

Good afternoon, ladies and gentlemen. Welcome to the ANSES fourth quarter 2021 results presentation. I now hand over to Mr. Ignacio Colmenares, Executive Chairman, and Alfredo Abreu, CFO. Gentlemen, please go ahead.

Good afternoon, ladies and gentlemen. Thank you for joining ANSES fourth quarter 2021 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 with slide three, where we summarize the business highlights in 2021, a year of strong cash flow generation and net debt reduction. Operating cash flow generation before hedges increased to 302 million in 2021. Free cash flow generation and net debt reduction amounted to 76 million, even after negative settlements from one of hedges of 106 million. A 21 million reduction in the use of factoring lines and 56 million carryover capex payments from previous years. No pulp or energy prices hedges have been contracted for 2022. Strong pulp prices have more than offset the temporary inflation in raw materials and logistics, boosting the operating margin of the pulp business. Moreover, main pulp producers have announced pulp price increases of up to $1,200 per tonne as from March 2022. industry specialists are further improving the price forecasts. In July and October 2021, the National Court issued three rulings that annull the extension of our Pontevedra concession. As a result, we recognized in first half 21 asset impairment charges and provisions for a net amount of 200 million. I'm glad to announce that the Supreme Court has accepted our appeal against the national court rulings. These decisions allow us to be more optimistic, although we must prudently wait for the final resolution, which may take several months. Excluding the accounting impact of those rulings, annual net income amounted to 10 million, after the impact of one of hedges. We close the year with a very strong balance sheet with just 102 million net debt and close to 400 million cash in balance. On December 2021, we agreed to rotate five PV assets with a combined capacity of 373 megawatt for an amount of up to 62 million, which we expect to cash in between the fourth quarter of 2022 and the first quarter of 2024. It is also very important to remember that Sustanalytic has ranked ENCE as the leader in sustainability in the global pulp industry. We have approved a new dividend policy based on free cash flow generation and prudent leverage ratios for business. Finally, I am pleased to announce that we will hold the Capital Market Day on March 17th to share with you our plans for the coming years. Let's now move to slide four, which shows our consolidated cash flow statement for 2021. As you can see, EBITDA before hedges reached 213 million in 2021 as a result of strong pulp and energy prices. On top of that, the regulatory collar, which is the difference between the energy market price and its regulated price, which we collect but it is not included in EBITDA, implied an extra cash inflow of 89 million, lifting the consolidating operating cash flow to over 300 million. As a result, consolidated free cash flow reached 76 million in 2021, even after negative settlements from one of hedgers of 106 million, a 21 million reduction in the use of factoring lines, and the 56 million carryover CAPEX payments from previous years. As you can see in the following slide number five, there are no part or electricity price hedges contracted for 2022. Those hedges were closed exceptionally in 2020 during the worst months of the pandemic prior to the sale of a minority stake in our renewable energy business. They were made to secure a minimum cash flow generation at a time when part prices were at record lows, when the duration of the pandemic was unknown, and when we had significant carryover capex payments committed for 2021. Those hedges had a negative impact of 106 million in 2021. The good news is that they ended at year end. Since then, we are benefiting fully from strong pulp and energy prices. Let's move now to slide 6, which shows the strong pulp price recovery in 2022. Gross peak prices in Europe have been trading at $1140 per tonne since July 2021. Main pulp producers have announced two price hikes in Europe this year, to $1,170 for February and $1,200 for March. Industry specialists are forecasting average prices of over $1,100 per ton in 2022. As you can see in the following slide, number 7, strong PAL prices are more than offsetting the temporary inflation in raw materials and logistics. boosting the operating margin of the pulp business by up to €155 per tonne in 2021 and by up to €207 per tonne in the fourth quarter. Higher cash cost in the fourth quarter was mainly due to the non-recurrent wood imports and the rise in logistic costs. We were bringing wood from our plantations in southern Spain and we have imported 90,000 tons of wood to mitigate the short-term reduction in eucalyptus harvesting capacity due to the strong demand for pine wood. In the first quarter 2022, you should expect higher cash costs than in the fourth quarter as we undertook annual maintenance shutdowns at both bio-mills and chemical and logistic prices have continued to soar. Let's look now at our pulp sales on slide eight. Our pulp sales amounted to almost 1 million tons in 2021. Over 90% of these sales went to the European market where our customers benefit from ENFE's unique wide portfolio of sustainable products and shorter delivery times. Our differentiated products accounted for 16% of our pulp sales compared to the 9% in the previous year. These products are more sustainable and are well adapted to replace plastic and softwood pulp. They also give higher margins. Turning to slide number nine, let me now summarize the current status of our Pontevedra concession. In July and October 2021, the National Court issued three rulings that annul the extension of our Pontevedra concession. As you remember, we booked in first half 2021 asset impairment charges and provisions for a net amount of 200 million, including a 48 million provision to cover the estimated cost of the potential dismantling of the bio-mill and the termination of outstanding contracts. We have appealed against these rulings to the Supreme Court, which, as you know, has just accepted one of them. This decision allows us to be optimistic, although we must prudently wait for the final resolution, which may take several months. I will now invite Alfredo to review the financial figures in more detail. Thank you, Ignacio.

As you can see in the following slide number 10, ENCE shows very strong underlying operating results in 2021. Our pulp business EBITDA before hedging impacts improved by six times year on year, up to 142 million euros driven by the strong recovery in pulp prices. Pulp hedges contracted back in 2020 for last year in the very uncertain environment caused by the pandemic had a negative impact of 53 million euros in this business. On the other hand, regarding cash, on top of the EBITDA figure and not included in it, we had a 24 million euro inflow coming from the regulatory collar, which is fully free to be used without any restriction. Focusing now in our renewable energy business, its EBITDA before hedges also increased by 54% year on year, on a like-for-like basis, excluding the Porto Llano CSP plant sold in December 2020. The fixed price electricity contracts signed again back in 2020 had a negative impact of over 53 million euros in this business. On the other hand, as in the power business, on top of the ABDA and not included in it, we had a 65 million euros cash inflow coming from the regulatory color of this business. Therefore, the total amount of cash inflows coming from the regulatory color, not seen in our ABDA figure, but that implies an effective cash inflow, was 89 million euros for 2021. With such strong operating results, our consolidated net income, including the 106 million euros negative settlements from the one-off hedges, was 10 million prior to registering the 200 million related to the Pontevedra provision, finally ending in a net income of 190 million euros minus 190 million euros for the year. As you can see in the following slide number 11, we closed 2021 with a very strong financial position. The debt was reduced down to 102 million euros and we finished the year with 387 million euros cash in balance. Our PAL business closed 2021 with a net cash position of 20 million euros, including 16 related to the lease contracts and a cash balance of 325 million euros. During 2021, we adjusted down our PAL business balance sheet, prepaying 146 million of various of our facilities. In addition, we successfully refinanced our revolving credit facility, increasing its availability up to 130 million euros. Also, we extended the maturity of another 18 million euros of bilateral loans until 2026. All of it, of course, maintaining our non-covenant policy. On the other hand, net debt in the renewable energy business amounted to 121 million euros at year-end, with long-term maturities and a cash imbalance of 72 million euros. I will now return the lead of this presentation back to our chairman for the final slides.

Thank you, Alfredo. Moving now to slide number 12, I would like to mention the highlights of our sustainability performance. As you know, I believe that companies that care for the environment, for the staff, for the communities, and with a strong corporate governance are more competitive in the long run. ENCE is already at the forefront in sustainable forestry, in the circular economy, in social commitment, in gender equality, and in corporate governance. Our best practices have been recognized by independent agencies such as MSCI, Fuji for Good, or Sustainalytics, which in its latest study ranks ENCE as the most sustainable player in the global pulp market. I would like to highlight the following achievements in 2021. Firstly, we have been pioneers in Europe in certifying the sustainability of the biomass we use as a fuel, thus ensuring our compliance with the sustainability criteria set out in the Red II Renewable Directive. all of our plants have already been certified. Secondly, 75% of our plants have been certified zero waste, highlighting ENFES' important contribution to the circular economy. Thirdly, we have continued to improve all our safety indicators, which are already 10 times better than the average for the industry in Spain. Fourthly, we have continued to reduce the order of both part bio-meals, which is already below one minute per day. And finally, as regards our board of directors, we have increased the percentage of female representation, which is now up to almost 40%, and we have increased also the percentage of independent directors. Turning to slide number 13, let me explain our new dividend policy, which is better adapted to ENFES cash generation profile. The dividend payment will be based on the cash available for distribution, ensuring a prudent leverage ratio of 2.5 times in the bulk business and 5 times in the energy business, assuming average cycle prices and considering CAPEX plans and commitments. NCES annual dividend will be distributed in three payments. The first interim dividend to be agreed at the end of the first semester. The second interim dividend to be agreed at the end of the third quarter. And then, the final dividend approved by the AGM. Exceptionally, this year, we will announce the payment of our first interim dividend in April corresponding to the first quarter 22 financial results. Finally, I am pleased to announce that we will hold the Capital Markets Day on March 17th to share with you our plans for the coming years. To conclude this presentation, I would like to emphasize the following key messages. 2021 was an year of strong free cash flow generation and net debt reduction, despite one-off hedges. No pulp or energy prices hedges have been contracted for 2022. We close 2021 with a very strong balance sheet with just 120 million net debt in our renewable energy business and 20 million net cash position in our pulp business. We expect free cash flow generation in 2022 to be much stronger benefiting fully from higher pulp and electricity prices. We have approved a new dividend policy based on cash flow generation and prudent leverage ratios. We will announce the payment of our first interim dividend in April. Regarding Pontevedra concession, we are optimistic since the Supreme Court has accepted our appeal. Thank you. We would be pleased to hear 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. We kindly ask you to make only one question at a time instead of stating multiple questions at the beginning to our speakers. Thank you. The first question comes from Jaime Escribano from Banco Santander. Please go ahead.

Hello, good afternoon. So one question from my side. In the Capital Markets Day, what should we expect? If you can anticipate at least the main topics, are you going to announce new investments or the guidance for 2022? Thank you very much.

Thank you, Jaime. On the Capital Market Day, we will explain to you our new strategic plan based on growing on the activities we can grow despite any results on the Pontevedra problem. And we will give you any figures you may need in order to evaluate the company. Thank you. And we will share with you what we expect from the pulp business on the future and from the energy business on the future. Okay, thank you. Thank you.

Thank you. The next question comes from Edward Buttonley from Burenberg. Please go ahead.

Good afternoon. Thanks for taking my questions. My first question would be pulp and energy prices are are currently very elevated, and you mentioned in the presentation that the new estimates for 2022 is $1,100 per ton over the course of the year. But internally, how do you see this, and how do you expect energy prices to average over the course of the year as well?

Thank you. Let's say today it's difficult to do a prediction for the full year because many things are happening on the world. Then regarding pulp, as you know, there is an announcement for March of $1,200. The customers are accepting it without any problem. Today, with the information we have and the vision we have for the market and the logistic constraints and the huge increase in raw materials, well, We see further increases coming after. Regarding the offer, the supply coming to the market, well, it's quite limited. You know that Brazil must be selling to their own mills in Asia because we almost don't see them on the market. We expect if there is no any negative announcement, we expect MAPA project to start on the second half of the year, then we don't expect pulp from them in Europe or in Asia during this year with the information we have today. And then the UPM project in Uruguay has been delayed. Then what means that, well, on a strong market with terrible constraints in logistics, we see the offer quite limited. On top of that, in this first half of the year, many annual shutdowns occurred on the market. And then, well, today our customers are desperate to receive a pulp. That is happening in Europe, that is happening in North Africa, Middle East, Americas, and Asia. And at the same time, in China, as you know, the customers reduce a lot their purchase of pulp on the second half of last year. And today there are very, very limited stocks and then they are buying and they are obliged to accept any price. Then we see strong prices for this year. Regarding the energy, well, it's very difficult because every day the average expected price for the year, for 2022, the price we already had plus the forward prices for the rest of the year are moving 30 to 40 euros per megawatt hour every day according to what happens on the gas and to what happens in in ukraine then today our best estimate is that the prices of the energy will be on a range between 150 and 200 euros per megawatt hour despite today they are over 200. Thank you, Edward.

Okay, thank you. So I guess based on your answers to that, so assuming pulp prices of $1,100 per ton and energy prices of let's say 200 euros per megawatt hour over the course of the year, on my estimates that means you're likely to generate 340 million in free cash flow this year. Does that figure seem reasonable to you given those two price assumptions? And if so, why do you think shares are trading on a 48% free cash flow yield for 2022?

Yeah, well, in PULP, as you know, we don't give free cash flow guidance in PULP. You have to assume the price you want, and it's quite easy exercise because you know our cash cost. Our cash cost is for the year is going to be on the range of 430, we estimate, with these huge raw materials increase, energy prices, and so on. And to transform this EBITDA in free cash flow, well, you have to increase by the collar on the PAL business. And the collar on the PAL business range between a minimum of 26 million euros at a megawatt price of 100 on the average on the year, and 52 million if the price of the energy is at 200 for the year. And regarding the CAPEX, well, we have for 2022 carryover payments from last year of 45 million in pulp, 15 million in energy. We have a regular maintenance and forestry of 20 million in pulp and 5 million in energy. Then we have a total capex payments for this year of 85 million. I think that with that, you only have to estimate the price of the pulp where you feel more comfortable and you can perfectly calculate the free cash flow for the pulp. And regarding the energy, well, Let's say that a minimum price of 100 euros per megawatt hour, well, we will have an EBITDA just below 40 million euros. And on top of that, we will make a cash inflow of 81 million for the collar, which means a free cash flow of almost 120 million. If you go to a price of the energy, an average price for the year of 160 million, The EBITDA will be 95. The COLA will be 113, which means an operating cash flow of 208. And with today's average price of the energy for the year, the best estimate of today for the market is 200. With 200, well, it's incredible. We have 134 million EBITDA, 133 million COLA, and an operating cash flow of 267. Thank you. You need two other figures. We estimate we are going to produce 1.6 gigawatt hour on the year in energy, and we are going to produce slightly above 1 million tons in power.

Okay, thank you very much for the detailed breakdown. I think the very last question for me. So under the new dividend policy, assuming kind of average EBITDA numbers and your current net debt levels, I estimate you could pay out to shareholders 400 million euros of cash. In terms of the special dividends you're talking about announcing in April, should we be expecting them to be anywhere near this kind of magnitude? Should we think they're probably more likely to be around 50 to 100 million euros. Are you giving any expectation around that?

No, no, no. It's an important fact that we should have pointed out. According to the Spanish regulation, now in April, we can only pay the net result of the first quarter. You cannot pay more than your net result, you know? Then what means that this dividend in April will be could be at the maximum of the net result on the first quarter. And when you were talking about 400 million, well, it is important to say that in this new dividend policy, it is much more linked to the free cash flow generation, but we should always take into account a prudent leverage. As we have said, 2.5 times EBITDA in PALP, five times in energy and, and that is very important, the commitments and investments we are going to do on the following years. And why do we have a so huge cash position on the company with so low debt? Well, because although today we are optimistic and we think we may win on the Pontevedra case, Well, we also may lose. And then in order to recover these EBITDA we are making in Pontevedra, maybe we invest in other activities or in another PALP or a large NAVIA. That is what we are going to explain to you on the Capital Market Day. But don't think that we are going to distribute 400 million euros. No. We are a prudent company, and we are not going to do such. Thank you.

Okay. Thank you very much for your time.

Thank you. Ladies and gentlemen, if you wish to ask a question, please press 01 on your telephone keypad. Once again, if you do have questions for our speakers, please press 01 on your telephone keypad. Thank you. The next question comes from Jaime Scribano from Banco Santander. Please go ahead.

Hi. Good afternoon again. You know, I just wanted to ask you about the Pontevedra case. What would be the next steps and how long do you think it could take the Supreme Court to resolve? Yeah, that would be the question. Thank you.

Thank you for your question, Jaime. Well, yesterday we received the information from the Supreme Court that they have accepted the appeal on one of the three cases. Normally, in four to six weeks, we should receive the other two informations. Normally, because the three sentences of July last year are the same, normally the Supreme Court will say the same. Then what we assume is that by mid-April, the three recourses will be accepted. And then if we copy what happened in this very important sentence of Murcia concession, who was dictated in December last year, well, it will take between six and nine months to the Supreme Court to finally decide whether the annulment of the Pontevedra concession is valid or they will cancel it.

Thank you. Thank you. And as a follow-up question, can you tell us a little bit the similarities of this case and why do you think it can generate, I don't know if the word is jurisprudence, I don't know, jurisprudence for your case? Thank you.

Yeah. In order to understand that, I should explain that deeply. The Murcia case and Pontevedra case were the same but the opposite, like on a mirror. A family asked for the extension of the concession according to the law of 2013. We asked the extension of Pontevedra according to the law of 2013. The government gave us the concession. These gentlemen, they asked for the concession later than us. the government has changed and the new government denied the concession. These gentlemen appealed to the Audiencia Nacional and the Audiencia Nacional gave them the concession. You know that the city of Pontevedra and others appealed our concession to the Audiencia Nacional and we lost the concession. Then, coming back to Murcia, as they win the concession in the Audiencia Nacional, it was the government who appealed to the Supreme Court. The Supreme Court accepted the case and has said that this concession is valid. Why it is valid and why it is very similar to our case, because what our lawyers were saying, their lawyers were saying, and what the Supreme Court has said is that for new concessions, if you ask now a new concession, today you have to justify that you cannot do your activity elsewhere. But for the old concessions, the concessions before the law of 1988, You don't need to justify that you cannot do what you have to do in the coastline. And why our lawyers are saying that and why the Supreme Court is saying the same? Because if you take the law and you take the reglament of the law, it is what it says. On new concessions, you have to justify. In old concessions, you don't have to justify. That's one thing. And the other thing is very important is that the lawyers have said to the Supreme Court that one of the reasons to accept the case should be that the land where our mill is was coastal land 80 years ago. But since The administration, the public administration, how do you say? Fill all these water area with land on the 50s. Build a road. Build a railway. Build a highway separating these lines from the sea. The Supreme Court was saying yesterday that they want to study if the coastal law is affecting or not affecting our activity. Thank you, Jaime. Sorry, Jaime, just to add. And what is also very important is that yesterday the Supreme Court in his auto was saying that they want to examine all those things because 5,000 persons are working directly or indirectly in this mill.

And just as a follow-up question, the Murcia case, what is the activity they do? Is it an industrial activity, or what is the similarity to your case?

No, it is a house, but on the law, the process to obtain a concession is the same for a swimming pool, for a house, for an industry, or for a supermarket. The only thing who changes is the terms of the concession. They are longer for house and they are shorter for industry. But the way of obtaining the concession is the same for any kind of utilization of the land. Okay. Thank you very clear. Thank you.

Thank you. The next question comes from Manuel Lorente from Mirabel. Please go ahead.

Hi, good afternoon. I perfectly understand that at this stage you want to be prudent regarding free cash flow generation for the full year, given the uncertainty that is surrounding us and in the context that the number looks pretty heavy, so to speak. If we just want to concentrate on the first quarter, I believe that you have plenty of visibility on the first quarter because of the N-1 nature of your pricing on the PAL business and the daily evolution of the pool price, right? And due to the fact that the best indication for FairQuest this year is what we have just reported on the fourth quarter, last year, where you have achieved a free cash flow of 77 million euros with an EBITDA, reported EBITDA of 21 million euros. Assuming that EBITDA for this first quarter might be slightly below or below the 79 million euros ex-MAT heads, but I will believe on the range of 50 to 60 million euros. It's a fair assumption of free cash flow generation above 100 million euros for the first quarter. That should be a good proxy for the different moving parts of your earnings.

Well, we don't give free cash flow guidance, but all the assumptions you have made are correct.

Okay, so just a follow-up. Assuming this, let's say, extremely positive tailwinds from the regulatory polar, what are your expectations going forward on this mechanism? We have here on a daily basis that the government is talking about the differences to see how the situation will evolve. Today we were referring that there might be an issue with the gas price in order to take it into consideration for the calculation of the pool. Anyway, we are a little bit lost in this regulation issue, and anything that you can share with us regarding this topic would be very appreciated.

Yeah Manuel, we have very low visibility because some conversations were between the Ministry and the Renewables Associations three weeks ago and that was on the press and you could read how the government wanted to reduce by two billion the the price of the energy only in the wind, solar, biomass, cogeneration and hydro. But the government wants to have a deal. They don't want to have problems with the renewables because we need to grow in renewables and they want a stable regime. And the negotiations were going, I would say, pretty well. Because at the end, well, we were close to an agreement between 350 and 400 million for the whole sector. Then for us, it was very limited. After these war between Russia and Ukraine, well, the negotiations have been stopped. And I think that we have to look at more with an European perspective and a Spanish perspective, because everybody is suffering today the huge prices of the gas, then today I have very limited vision of what can happen.

I see. And just continue with the free cash flow story for this year. As you were perfectly saying, and I perfectly understand, it's very difficult to put a number, right, But it looks like there is a very positive momentum on free cash flow on the company this year. The backdrop that we are seeing at this stage. So this very positive or expected very positive free cash flow generation might be a trigger for any, let's say, more proactive resolution on Contravetra in the sense that speed up the investment in order to move production or to move facilities, things look like. You are having extra money in the pocket this year before what you were expecting probably several quarters ago.

No, no. I would say that regarding the The PALP business and what happens with Pontevedra, well, we have to wait, as I was saying before, till probably the end of the year in order to know what happens at the end. Well, you know that our base case is to defend Pontevedra continuity. And, well, we have ideas to diversify and expand NAVIA. We'll explain that to you on the Capital Market Day. And we also want, as you know, to grow in energy. But, well, today I don't see a huge investment in PALF because what we think is that we will continue defending Monteverde.

Okay. And just my final question, I don't know if I have it here properly, 430 million euros cash cost is the best guess for this year. And if that is correct, what is the facing between the different quarter of semesters?

Yeah. Today, again, if the energy prices who are pushing up the cost of chemicals and the cost of freight rates increase, stay where they are, well, I think that we are going to be 430, maximum 435. We see a very high cash cost on the first quarter. On the first quarter, we see even 480, 485. It is due that we only, on top of the soaring prices of energy and chemicals and freight rates, we have the effect of the shutdowns of both mills. And this effect is roughly 60 euros per ton. And then, well, we expect on the second, third, and fourth quarter to be around 230. Yeah, that's what we expect. With the prices of the chemicals and the energy and the fuel at the level where they are today, okay? And... as it is something who is not only happening to us, well, you have to take into account that 50 euros of cost increase, if you pass these 50 euros to dollar, and you put that on a gross price or net price, is roughly $90. What means that out of the $1,200 of today, there are $90 justified by the increase of the cost. That is why we think that the price should continue going up in order to compensate this terrible cost increase we are suffering, not only, but all the industry. Thank you.

Thank you. Ladies and gentlemen, let me remind you again, if you have any questions, please press 01 on your telephone keypad. Thank you. The next question comes from Joel Pinto from JEP Capital. Please, go ahead.

Hi, good morning, everyone. Just a follow-up on Pontevedra. If the coastal law finally does not apply, what would be the limit for the compensation lifetime?

Well, the coastal law is more limited than the renting of any land who belongs to the state. then it will be the minimum of 2,073. That's the minimum, yeah.

Thank you.

Thank you. The next question comes from Luis de Tornado from Adobe HF. Please go ahead.

Good afternoon. My question relates to the forestry. These rising costs, you referred to the increased cost in fouling because of the pine versus eucalyptus debate and you're planning to do some initiatives there. I would like to know if you think this is something sustainable as construction demand recovers or is something specific to your region, to your company, or, I mean, if you believe that it is something that should be sustainable or we should only expect it in the first half or maybe only this year. Thank you.

Thank you. Yeah, the price of wood panels doubled in 2021, but in Spain worldwide. And that's why the demand of pine has increased a lot last year and is still very, very strong. The harvesting capacity, as many, many activities in the agriculture are limited by the human resources limitation. And then, well, as they are paying anything for the pine, well, they are harvesting pine instead of eucalyptus, and we are a bit on a shortage of eucalyptus. Well, despite I recognize a terrible cash cost in the first quarter, on the first quarter, well, we see, Our cost of wood is going to be lower than on the fourth quarter last year. Then what we are doing is starting to work. We decided on the fourth quarter last year that it was better, despite the huge prices of the pulp, to lose some tons, and we lost almost 15,000 tons on the fourth quarter, in order to not hot the Eucalyptus market. Because once the prices go up, it will be very difficult to reduce them when the demand of the pine will be reduced. Then we decided to lose a bit of volume and to accept not working at 100% capacity on the fourth quarter. That was not the case on the first case. We have plenty of stocks now because we had the annual shutdowns. We imported last year. Well, we may import this year. We will see. We have the opportunity to import. We will decide that later on the year. We were moving wood from Huelva to Galicia, which is extremely expensive. We may continue doing such. And we are increasing the capacity of harvesting. invest on the second half of last year and beginning of this year money to buy harvesting machines and to train people and to have more teams harvesting for us and that's an increase on harvesting just above 100,000 tons this year and two times more on an annual basis from January next year and we will continue doing those things. Then we are doing things to limit the damages We don't want to increase a lot the price of the eucalyptus because it would be difficult to decrease later, and then the price of the eucalyptus has increased very slightly. But we see that with all this scarcity of raw materials and people living more at home, traveling less, they will continue expending money in their house, in their kitchens, changing the furnitures, and then we expect the price of the panel to continue very high and the price of the pine high. Then we see that all these periods with high prices of the wood, both pine and eucalyptus will continue the full year. That's our expectation.

Thank you very much.

Ladies and gentlemen, there are no further questions in the conference call. I give back the floor to Mr. Ignacio Colmenares and Mr. Alfredo Abellio. Thank you.

Thank you very much, ladies and gentlemen. I look forward to meeting you on March 17th in our Capital Market Days. Thank you.