Merlin Pptys Socimi Ord

Ladies and gentlemen, welcome and thank you for joining Merlin's 9-month, 24-week Trading Update Conference Call. As in previous call, the results for CEO Ismael Clemente will provide you with the main highlights of the period. Thereafter, we will open the line for Q&A. To raise questions, please press star followed by number 5 on your telephone. With no further delay, I'll have the floor to Ismael. Thank you.

Thank you, Ines. Good afternoon, everyone. Welcome to Merlin. third quarter results presentation. On Monday, we were heading to approve of the Board of Directors and report to market an excellent set of results, both quantitatively and qualitatively, given particularly the progress on the data center business plan. Disgracefully, given the news about the attempted modification of the regime, these results have been all of a sudden overshadowed by uncertainty and anger, two of the worst enemies of the stock market. Our shares plummeted on Tuesday by more than 7% and we have been unable to recover the previous level during the week. It's not been our fault that we feel sorry for this and beg your pardon for being subject to such a volatile regulation depending on political agreements outside of what one could consider common sense. As of lunchtime Monday, there was a draft law about the minimum taxation of multinationals. That law was a transposition of the EU directive. That EU directive very precisely exempts the rates from being subject to the scope of that minimum taxation. There were some proposed amendments, including number 80, by the socialist group, assuming the text of the directive and exempting their rates. All of a sudden, the meeting among parliamentary groups to prepare the approval of the draft law was adjourned. A new meeting was called exclusively between the socialist and communist groups, and the gates of hell opened right above our heads. The communist group called Sumari in Spain proposed the elimination of the regime and somehow the socialists did not oppose, which is strange given that in 10 years of operation and many meetings with their policy makers and regulators, they have always manifested that they perfectly understand the social and economic motivation of the regime within the framework of the internationally recognized regime. Luckily for us, the parliamentary agreement reached by the socialist group on Monday did not meet sufficient consensus to be finally approved, since it was not consulted with nor supported by the technical bodies of the government and the Economic Office of Presidency. It was also not supported by the Catalan and Basque Conservative parties. Next Monday, a new meeting will be held among all parliamentary groups. Till then, we have to remain necessarily prudent. And consequently, we have been analyzing the financial impact of an elimination of the SOSIMI regime and determining the course of action of MERLIN should such an elimination finally be materialized. With the current tax regulations in place, we have estimated an impact should this measure have theoretically been applied to financial year 24 of approximately 8.5% of FFO. This assumes managing the company on a business as usual basis. Of course, this wouldn't be the case going forward as we have a number of tools to further reduce this impact. In compliance to our fiduciary duty with shareholders, we will need to quickly address sheltering income and profits of Portuguese source from a spurious double taxation in Spain. These represent at present around 12% of our cash flow, and with the ongoing development of Vilafranca de Xira data center or data campus, this figure could easily drift up towards more than 20%. Moreover, any potential future income and profit from other European countries needs also to be protected. Spanish income and profit would remain fully taxed, and it would make no difference staying here or moving abroad. We could operate here through what is called a permanent establishment and the assets could remain with the existing debt. The conclusion is relatively easy to grasp for anyone with economic or tax knowledge. IBEX 35 will continue drifting towards IBEX 5, drawn in the wave of populism. Let me talk about what really matters and bring all of us here, which is our results. Okay, our results have been excellent, thank God. The FFO has been increasing organically at close to 7% and the overall occupancy continues growing, being at present at 95.6%, improving at quarter on quarter on all asset classes. Given the fact that we executed at 20% total shares outstanding capital increase in July, of course the FFO and NPA metrics have worsened, minus 11 and minus seven, but you can easily notice that these correspond favorably or these compare favorably to the 17% theoretical dilution. So we are clearly recovering part of the dilution caused by the capital increase already in 2024. As a consequence of that, we have proposed to the board and obtained approval for the distribution of a dividend of 18 cents per share that will be payable on the 10th of December. Moody's has upgraded our debt rating to BAA1, which comes on top of the upgrade by S&P to BBB+. Going down to the business, in October, we signed a couple of large leases, securing more than $500 million in backlog rents. That includes close to 135 square meters pre-let turnkey for three sheds in our Lisbon Logistics Park in Vilafranca de Xira on a 25 year basis and a 15 megawatt lease, 10 years with extensions in our data center in Barcelona, BCN01, which is now fully let and will impact the whole building will impact our income next year by around $23 million, which is above what we had internally forecasted in our business plan for the year. Regarding the rest of the businesses, we had very satisfactory like-for-like growth in rents, both in offices, 2.5%, logistics, 3.2%, or shopping centers, 2.3%. The release spread was positive, too, with 1.7% in offices, 4.6% in logistics, and 5.5% in shopping centers. What is more important, the three asset classes are pointing to a continuation or even a sharpening of the good performance towards year end. I mean, logistics is currently around 98% occupied. We expect to finish the year above 99. We said to you that it will be between 92.5 and 93. It's going to get above 93. And shopping centers are going to be around flat, 96.2 or similar, because we have reached probably technical full occupancy. I mean, the rest is simply rotation of shops. There's always shops we need to rotate. So the company is clearly... in very good shape. Traditional asset classes are firing with all cylinders up. And data centers, the data center strategy is starting to show some signs of its real potential, of which we expect to continue giving you positive news in results presentations to come. Without further delay, I will move into Q&A, but I wanted to comment because it's been the subject of a number of analyst questions. What is the FFO guidance for the year with the new share count? We are pointing towards a minimum of 54 cents. The dividend guidance, we are pointing at around 40 cents. with the new share count. Remember last year we distributed 44, so we expect the organic performance of the company to continue eating on the dilution cost by the capital increase. We will make also a number of disposals, but it will not be a relevant figure, around 30 million. Another point of information which is important is that given the tragedy of the floods in the eastern coast of Spain, we requested and obtained board approval in order to provide some relief aid to the victims in an amount of around 1 million euros, which is equivalent to 0.0018 per share. That will be complemented also by employee donations. Basically, it's being addressed the main deficit in the area, which is heavy machinery in order to remove the mud, the debris, and the cars from streets. We are currently working in two schools and we are trying to restore them back to normality. There are some priorities that have been established by the regional government and schools, of course, are among them. We have also provided some direct aid to employees affected, not employees of ours, thanks God, but employees of condominium associations with which we have daily contact or relationship. And we have also addressed part of the relief aid to a little town in in Albacete, in Castilla-La Mancha, called Le Tour World Heritage, which has almost disappeared as a consequence of the flood. None of our assets in the area have suffered significant damages. The worst has been the Riva Roja logistic complex, which is right next to the Barranco del Pollo, to the protagonist of the disaster. And although there was a dam effect of the A3 highway, it ended up flooding. We are now cleaning up together with the client and in about two or three weeks should go back to normality if nothing goes wrong. We have also suffered some minor leaks because the rainfall was bigger than the extraction capacity of some of the collectors. in a number of other assets, but nothing to remark or to report. We have been very, very lucky in this situation. Okay, let's move into Q&A because I am sure you will bombard us with the regime. I mean, I can't say what I can say. I cannot make future predictions. but eventually I am all yours and will be openly answering any questions you might have.

Okay, so we remind you that for those who want to raise questions, please press star followed by number five. Thank you. The first question comes from the line of Ignacio. Ignacio, the floor is yours.

Good afternoon. Thank you for the presentation and taking our questions. I have two. Firstly, could you provide more detail on how you reach the 8.5% impact to FFO? And my second question is about the new contract signing data centers. Could you please share your thoughts on how the actual conditions compare to what you had in mind in the beginning of the year? How do you see demand for data centers evolving? Thank you very much. OK. Thank you, Ignacio.

Regarding the 8.5%, it's been relatively complex calculation because you need to make a simulation of consolidation and subsidiaries versus mother company. I mean, it's being complicated. It's being performed during the week by the financial department led by Miguel. The number stems out of a relatively simple combination that all of you as economists know how it works. We are a company with a lot of accounting and tax depreciation of assets. Furthermore, we of course have financial expense, which can be deducted from the tax basis, although there are a number of recent limitations that have been introduced by law. And on top of that, we have a significant amount of high quality you know, tax laws carry forward stemming out of our merger with Metrobacesa, which can be also employed within the legal limits, which sometimes move like a roller coaster, but within the current legal limits can be employed also to smoothen the effect of taxation in our FFO. When I say that this is business as usual, I say this is business as usual because, of course, we have a number of assets mainly coming from Metro Batesa which are accounted for in our tax books at a relatively high tax basis, which is not corresponding to its appraisal or market value, and we could easily get rid of one of those assets per year and eventually shelter most of our ordinary results for the year, further reducing the effect of this arbitrary measure in our shareholders. So this is basically how we have calculated. Regarding the lease in Barcelona, well, as you know, we have to be relatively prudent, so we cannot reveal neither client nor specifically conditions. All that I can tell you is that it is a 10-year lease with significant number of renewals, and that our Phase 1 business plan assumed, once it was recalculated, assumed an average rent in the region of $1.12 per kilowatt per month. And at present, we are running above that level. We hope that in future leases we can continue beating that number, but I prefer not to provide the exact price at which the deal has been closed.

Okay, thank you very much, Ismael. It's a pleasure.

So the next question comes from the line of Jonathan Cunaro from Goldman Sachs. Jonathan, the line is yours.

Thanks. Just to follow up on the data center at the moment, can you perhaps give a bit more colors to the discussions you are having currently, the type of tenants looking at this space generally? I mean, obviously, I understand you cannot go necessarily into specifics, but at least the type of people that are looking at it and also when you expect effectively to convert other bookings into into leases and perhaps if you have any color to give on the level of bookings versus the space that you have available currently. So that would be my first question, please. And the second one is just on revaluation gains on the back of finding leases in the data center business. How you expect essentially NTA to evolve and revaluation gains to evolve as you sign these leases? What is the timing of recognition essentially of capital gains there? Thank you.

OK. Thank you, Jonathan. Look, regarding the type of tenants, I mean, our data centers are pretty flexible. And we do not discard or reject any demand that we might have. But of course, I mean, from a time to cash flow perspective, We prefer, if at all possible, filling them up in big blocks because it gives us, let's say, a speedier conversion of cash flow and therefore a speedier compliance with the business plan that was relieved to market. Sometimes we entertain conversations with enterprise clients, which come normally with technology integrators, but those are normally very small demands, between $100,000 to $200,000. Of course, you can charge a very high rent, but you will not fill up your space very, very quickly. In all cases, in all data centers, we always leave a little room for maneuver with enterprise traffic. oscillating from half a megawatt to one megawatt and a half, something around that, we normally leave a little bit of room to play with that. Then our conversations are normally addressed at cloud operators. This is important because they can contract significant blocks of IT capacity and even bigger blocks when you talk to hyperscalers. and more recently with artificial intelligence operators, or as they call themselves, artificial intelligence hyperscalers. Those companies, they have varying degrees of financial credit worthiness, but we perform an analysis of their balance sheet, P&L, statements of cash, et cetera, and we try, I mean, it's not a, You can never be 100% right, but we try to engage with those whom we believe are more creditworthy because we have the spirit of a real estate company. So, of course, we want to have clients and tenants who comply with their obligations. So this is the type of clientele we are... we are entertaining conversation with. Regarding the other two data centers and the status of bookings, both are fully booked. However, the cases vary. In the case of Madrid, it is booked, but we are going to receive the first tranche of eight megawatts from the distribution company at the end of November. And frankly speaking, we didn't want to slip in a lease in Madrid and then not have the electricity. So we have dragged our feet a little bit and waited to really have the electricity and then entertain serious conversations in the market. We are in the middle of those and hopefully in 2025 mid-year those conversations should come to fruition and eventually we will convert cash flow, but we will convert cash flow in small amount. I mean, it will not be, I mean, the total capacity, total maximum design of that data center is 20 megawatts IT and that requires around 30 megawatts of utility supply. We are trying to work our magic and find other sources of electricity, but for the moment, all that we can rely to market is that you know, the full capacity will not be in the data center until the beginning of 26. In the Basque Country, it's a very, very different situation. It's simply that, you know, we had a number of bookings, but one of them was particularly good, and we have decided to take a commercial risk and double up. So, instead of just talking about booking and conversion into lease of building number three, which is, by the way, is the first building that we have built. I mean, for some reason, it's three to one. So instead of just limiting our conversations to building number three, we have included building number two, which is the one we are starting to build as of end of this year. We should be receiving the license momentarily because we know that the Municipality has now all the papers ready. And eventually, I mean, option for the future of building number one. If that happens, of course, we will significantly risk, I mean, or more precisely, we will 50% risk the execution of phase two. And I'm sure the market will be very, very pleased, of course. Regarding conversion of all these into MTA, I mean, we have commented on many occasions that, John, that we believe the conversion of MTA will run faster than the actual cash flows. Of course, we are doing our best to bring cash flows as close to zero, moment zero, as possible. But, you know, as we... know progress with commercialization as the market sees evidence of what we are doing and more importantly as people uh you know compares us with the for example with the recent transaction of naviacs uh i am sure there will be an nta recognition which probably will happen faster than uh the conversion of of cash flow i wouldn't love to get the market too much carried away. But of course, I know it's part of life. It's part of the market hype these days. And I cannot say no. I mean, it's good for shareholders.

Okay. Thanks for the call. Very helpful. It's a pleasure. Thank you.

So the next question comes from the line of Ana Calante from Morgan Stanley. Ana, who is yours?

Thank you. So I have a question slightly related to the Sothini regime. I know that you cannot comment a lot on that, but my question is more in terms of business related. Do you think that the possibility of the potential removal of the Sothini regime also opens the door for a development focused company like yours to maybe accelerate developments either in the data center space or in other asset classes, given that you will not be longer forced to pay out the dividend and you will be able to retain earnings and also to increase your development exposure?

Yes. Well, it is a yes. I mean, if we would need to change a little bit our management style in order to reduce as much as possible the tax profile of the company. And one of the possibilities clearly, if let's say regular corporate legislation applies to us, would be to accelerate our development of data centers and try to shelter as much income as possible and eventually reduce the tax basis to as close as zero That is clearly a possibility. However, once the legislator gets into arbitrariety, you know, you can never discard further actions, you know, stemming out of that kind of, you know, populist stance. But anyway, I mean, we clearly have all the options open and we'll need to do further analysis regarding that, of which, of course, we will be Very happy to talk about the results with you.

Thank you. OK. So the next question comes from the line of .

The floor is yours.

Hi. Good afternoon. Thank you for this presentation. We have two questions, if I may. So the first one would be on the . Maybe if you can give us maybe more color on what could be the central scenario that you can expect. So that would be my first question. My second question would be on the occupancy rate for offices. What do we expect now in 2025? So could you reach maybe 94% of occupancy rate maybe for next year? And my third question would be on data center. and mostly on the management of fraud risk. So, how data centers are well protected against fraud risk today, and also asset classes. So, do you think that you will now have differently this fraud risk for offices, shopping centers, and logistics? Those are my three questions.

Okay. Look, Florent, the central scenario at present, as we speak, as of this time, an hour, is that the modification or the, better said, the elimination of the Sosini regime finally doesn't take place. This is our central scenario, of course, we have to be prepared for the worst, but this at present, the central scenario, according to the information we have. Then, regarding offices, occupancy rate forward in 2025. Only God knows. I mean, we don't know what will be at present. We are preparing or we are doing our management reviews, our bottom-up analysis together with the asset managers. for next year and we will relay some guidance to the market during the February 2025 financial year 24 results. At present, I cannot know what is going to be the occupancy of next year because I need to sit down with all the teams and see exactly how they see. They have very valuable information and, of course, by consolidating all that information, We normally come always up with a very accurate number. I mean, you have seen us giving relatively accurate numbers in past years. Regarding flood risk, well, in the case of data centers, that is obvious, but it's also an easy answer. I mean, one of the design requirements of any data center is to be at least one and a half meters above the 500-year fraud level, whether calculated by theoretical models or by empiric evidence. So, for example, had we built a data center in Valencia, it wouldn't have been located where the low land where the fraud happened. It would have been located in a different place. Same applies for the one in Lisbon, which as you know close to the Tagus River, that is clearly above the 500-year flood level, and with the ones in Madrid, Barcelona, and the Basque Country, which again are theoretically protected against floods. I mean, you are never fully protected against an act of God. But in principle, this is the spirit of the design of our disease, because it is super important. In that case, you know, imagine... you will provoke a blank of the data center and you will, of course, prejudice or you will inflict a lot of harm to your clients because they will suffer stopping operations. It wouldn't, it would be a Mongolian artifact.

Okay.

Okay. Thank you very much.

Thank you. Thank you. So the next question comes from the line of Fernando Alvarez from Alantra. Fernando, it's always yours.

Hello. Thank you for taking the question. I have three, please. First is on going back, apologies, going back on the 8.5% impact on FFO. Just to make sure that you are not including the use of tax credits, or yes, it's mine.

No, we are including the legal use of tax credits that we have in our balance sheet as of today. you might question how long will those tax credits last. I mean, many years. We have significant tax credits stemming out of the merger with MetroBafesa, so we will be able to shelter income for a number of years till common sense is recovered.

Okay, thank you. And then a couple of questions on data centers. So if I... remember well, the building number three, so the first that you are building, was going with only a quarter delay compared to that of Barcelona. So my question is, I don't know if it's possible for you guys to reach a pre-letting for the entire building soon, or you are holding conversations with several tenants and could probably take place later in 2025. And then last question also on data centers. So you have a big step up in CapEx next year. And I don't know how, you know, what is the visibility on this as of today based on the conversations you're having with suppliers and so on. And just wondering, you know, if things are going as expected or better or worse.

Thank you. Okay. On Bilbao, as commented before, Fernando, we have tied our building number three with our building number two. So that, you know, it's of course good and bad because it will delay a little bit the time to cash flow. But if we get to cash flow, it will be more cash flow. So our timing is mid next year to close an agreement and towards end of next year, you know, start of payments. So this is what we are managing at present. Very importantly, business is about taking calculated risks. So if for some reason the conversations with the tenant blow up, I mean, don't jump to the roof. find other tenants and fill up building number three, and then we will fill up building number two when it's ready. But, you know, if we can close this deal, it's clearly a much better option for the company for a number of reasons, including qualitative reasons. It is good for us. Okay, and then regarding CAPEX25, look, All good. I mean, we are not seeing any significant variations in the price of equipment as of yet. And we are even starting to see prospectively. I mean, then those numbers need to be tested with reality. But prospectively, we are seeing some efficiency gains in our construction costs on a per-mail work basis. standing out of the fact that first our learning curve has clearly evolved and second if you build denser buildings with denser clients you normally achieve better prices per megawatt so this is what we are what we are seeing at present okay thank you thank you okay

So, thank you, Fernando. The next question comes from the line of Celine. Celine, can you... I mean, the floor is yours. Thank you.

Hi, Ismael. Just one question for you, please, on the possible abolition of the SOSIMI regime. Can you tell us what that means for your dividend payout ratio going forward? Do you have to revise that down if that wants to be implemented? Thank you.

Look, Celine, in principle, If we were to continue managing the company, let's say business as usual, the effect in FFO of around 8.5%, you could translate that to the dividend payment capacity on a like-for-like basis. So the dividend would reduce by around 8.5%. However, if we can make more efficient the sheltering of FFO, and we go down that 8.5% mark, that would also move Mutatis Mutandis to the dividend payment capacity. And regarding policy, dividend payment policy, in principle it should remain relatively equal because even though our policy makers may not give us the treatment of SOFIMI, the market recognizes us as a SOFIMI. there is no way in trying to do things different. It would be very comfortable for us, of course, to suspend the dividend and accumulate lots of cash flow that would self-finance our data center effort. But I am not sure all shareholders of the company would welcome such a measure because we are perfectly conscious that a very significant number of our shareholders are dividend-driven. we need to continue performing. We are private sector. In private sector, you make a living out of complying with your word. So we need to comply with our word to market, which is to distribute dividend. We would simply move jurisdiction and pay dividends from a different jurisdiction and that's it. But we will need to continue paying dividend.

Yes, thank you very much. You're welcome, Celine.

Thank you, Celine. So the next question comes from the line of Colm from Politic. Colm, the line is yours. Thank you.

Hello, guys. Thanks for taking my question. Just two apologies if you've already answered this. You talked a lot last quarter about the problems with data center supply chains and potential delays for phase one. Could you just give a quick update on the delays and what you're seeing in November? And then secondly, we've seen a lot of news about big tech companies investing heavily in Spanish data center market, Microsoft, Amazon, Blackstone. How are you viewing the competitive landscape today? And could this be a potential headwind or a tailwind going into 2027? Okay. Thank you, Calvin.

Look, regarding the delays, Have you been with me during the summer? I was quite a nervous person because at the end of June, we started hearing among clients a rumor that they were not getting certainty of date of delay of components from the usual suppliers or the usual supplier. And during the month of July, those rumors intensified. And finally, in August, we knew that two of the main, well, the main two chip makers of NVIDIA, TSMC and ASML, had detected some chips with, well, the percentage of flaws, let's say, in the delivery of chips to NVIDIA was above average, historical average or tolerance average for the Grace Blackwell GB200 series. So, most of the people who had, you know, was in the waiting list for the delivery of GB200 couldn't be assured as to the date of reception of their equipment. So most of the waiting list of GB200 moved to the H100 and H200 series, which are the current state of the art. GB200 is simply too new. That H100 and H200 is what is currently being installed in most data centers. So that also created a clogging of the waiting list of the age 100 and age 200. We immediately noticed that a number of clients with whom we were entertaining conversations in order to convert bookings into lettings basically stopped those conversations because their legal departments were very clear in advising them that without certainty of date of delivery of components, they couldn't commit to a certain date of the start of cash flow disbursements to the landlord of their premises. So it was a very, very bad period. However, towards the end of August, we started hearing some different music and in September it was confirmed that they have been able to overcome the situation and they were resuming normal production, mass production of GB200 series by November. And the reflection in our life was immediate because one of the clients who have stopped conversations with us regarding Barcelona came back to us and we were able to convert into a full-format lease with a certain date of start of payment. So that was the situation. And at present, GB200 is now back to normality. Of course, there is a significant delay in obtaining that machinery because it's expensive and sophisticated and not every client has access to it because NVIDIA is quite selective in serving that machinery in order to avoid you know, spurious copying by, you know, geostrategical rivals. And the H100 and H200 are now on a very short delivery time. So now this is highly employed by people who doesn't need necessarily a super high computing capacity that they don't need to go to racks of I mean, people who can stay within the 60 to 70 range are now massively employing normally age 200. So this is the situation at present. Thanks God. But had you made me this question in August, I would have cried probably in your shoulder. But it is what it is. Regarding the big tech competition. Look, to me, rather than a threat, I see it as an encouraging factor because it clearly shows that we were right in betting about Iberian Peninsula as a data center hub. And second, it will create a cluster of technology and efficiency and staff which is always very interesting. I mean, it's very, very good that in Spain more and more engineers who are currently electrical, mechanical engineers, you know, telecom, that people get recycled into the data center business because in the future with the Amounts of IT capacity that just us, that we are developing, we are going to need a significant number of those highly skilled professionals working with us. So it's always very good that people get into the business. This is what I can say. I mean, we do not feel too much threatened about that. And in some cases, news relate to market differ a little bit from reality. So sometimes those big announcements, etc., not necessarily convert into reality because we know they will not convert into reality.

Okay, thank you.

You're welcome.

So the next question comes from the line of Mark Malti from Bank of America. Mark, the line is yours.

Yes, thank you very much, everyone. Just wanted to confirm your, sorry, I might have missed it, your guidance for the FFO this year per share. I think it's towards a minimum of 0.54. And my point is around, are you taking into account the benefit of the 1.7 billion cash you have in your balance sheet on the earnings, the income you're going to get from that, that kind of thing? 3% return, which is about 12 million per quarter. Is that taken into account in this guidance, and why do you need to lower it from the 0.59 or 0.58 that the market is currently forecasting?

Look, what the market is forecasting, Mark, I believe is an average that has been created by computer. I mean, I don't know about Bloomberg, or I don't know, but I believe it is a mix between the former share count and the new share count because with the new share count getting to 58 would be impossible because remember we have just caused a 20% dilution to the share count of the company which translates into a 17% dilution in returns so our guidance for year 24 with the former share count was 58 then we upped it to around 60 and in reality we were running a little bit more towards 61 maybe maybe 61 62 in a very good day but I don't think so and if you apply a 17 percent dilution to those figures it is impossible that you get to 58 or 57 or 59. So the number is 54, which corresponds more to 0.6 weighted, you know, averaging the number of months we have been with one result and with one share count and with the other share count, we will, of course, try to improve it because that 0.60 is below what we were running for, 61, maybe 62 in a good day. So we will try to improve it, but don't expect miracles. I mean, we can improve it to maybe 55, but we are going to be far from that 58 or 59 that some people are telling us.

to make sure that I'm not missing anything here. What number of shares are you taking into account on average over the year? Is it a full number of shares or it's a weighted average number of shares you're taking into account for that calculation?

Total number of shares as of today.

Okay.

Claro, claro. We are talking about number of shares as of today, not weighted, because weighted is bullshit. I mean, you cannot be paid dividend based on weighted. We have to pay dividend based on real. So we always talk real, okay?

Okay, so that's where the difference comes from. Okay, so effectively you're taking the 564 million shares, total number of shares, instead of the 510 weighted average number of shares, which is where the difference comes from. Okay, fine. And I do agree with you on the dividend. The dividend makes absolutely sense now. No doubt about it, but on the FFO per share, you have effectively created only six months of new shares. You're going to get six months of additional cash or income from the million cash you raised. That's what I wanted to make sure. Okay, so that's where the difference comes from. Thank you very much. It's my pleasure.

Fantastic, Mark. Thank you.

You're welcome.