Robinsons Retail Holdings, Inc.

Hi, good afternoon, everybody. Thank you for joining us to review Robinson's details and all the results for the first half of 2020. I am Sheena Diwali, the Company's Investor Relations Officer. The speakers for today are Mr. Bina Gokhamoyute, our President and CEO. This may be Mr. Subad, our CFO. Mr. Sandy Paul, the Managing Director of the Supermarket Center. Mr. Christine Torres, the group general manager of the drugstore segment. Mr. Ted Sobono, the general manager of the IYM FEDS. Ms. Carmina Cuisón, the general manager of the business department store and duty. Mr. Jerez Ramalipa, the general manager of Uncle John's. And Ms. Edna Villesa, the general manager of OPA. This presentation will cover the company's financial performance. In the second quarter and first half of this year, an update on our SOAR network and recent company developments. Our Q&A section will follow after the presentation. As a reminder, for the Q&A portion, please use the Q&A function on your Zoom dashboard to type in your questions. Try to limit yourself initially to a maximum of three questions, including follow-ups, so you can comment as many participants as possible. you know, make you log in into the Q&A box for additional questions. And they'll also use the rate plan function if you would like to ask your questions now. With that, I will now turn it over to our president, Ms. Leo. This will be it. Good afternoon. Here are the highlights of our results after the first half of 2023. Consolidated net sales grew by 10.5%, 91 billion. Vended same-store sales growth of 6.3%. Capital expenditures of 1.4 billion. Gross profit increased by 11.4% to 21.5 billion, driven by 20-billion gross margin expansion. Event of 3.9 billion up by 6.8%. Core net earnings rose by 10.6% to 2.4 billion. store network of 2,341 stores, and 2,067 PGP franchise practices. Our store count stood at 2,341 as of end June, composed of 328 supermarkets, 1,018 drugstores, 51 department stores, 230 DIY stores, 416 convenience stores, and 298 specialty stores. We also have 2,067 franchise stores of TV. We opened 67 new stores and closed 36 in the first half. All of the openings came from the drugstores, DIY, and supermarkets. But we also opened some for the specialty segment. Note that most of our store openings are done in the latter half of the year. Meanwhile, GoFart continues to implement our online store network, enabling us to become a true multi-channel retailer. Despite the challenging days in the second quarter of 2022, which was boosted by election-related spending, economic reopening, and revenge consumption, consolidated top sales in the second quarter still grew by 8% to 46.4 billion. Blended SSSG for the quarter came in at 3.6% at normal levels. Meanwhile, net sales in the first half of 2023 grew by 10.5% to 91 billion. driven by double-digit growth from supermarkets, drugstores, and department stores. And the SFFP increased by 6.3% in the first half. In terms of revenue breakdown, the Staples business accounted for 78% of total sales, while discretionary formats overrides the 22% bottoms. This is a more detailed picture of our P&Ls. Net sales increased by 10.5% to 91 billion in the first half. Gross margin in the first half expanded by 20 gigs to 23.7% due to changes in product needs and higher in-debt income. Income rose by 6.8% in the first half to 3.9%, to 3.9 billion driven by positive top-line growth. Net income compared and declined by 34.3%, the first half of 2023 to 1.8 billion due to forex clauses and equalized logit from those days. We know that the interest expense from the BPI shares acquisition financing was offset by the cut dividends we received from BPI in the second quarter. Meanwhile, our quarter makes which exclude interest income from bonds, forex, equity, and earnings of associates interest expense related to the BPI shares, the ICAT dividends, and others. grew by 10.6% to $1.4 billion. Now, Sandy will discuss the supermarket segment.

Thank you, Mr. Mina. The supermarket segment posted net sales of $51.9 billion in the first half of 2023. This is 11% higher year-on-year. The top line was supported by contributions from mutual benefited from higher transaction count. Gross margin eased by 20 bips to 21.4% in the first half, largely due to the increasing share of business from Grossari. Excluding Grossari, gross margin increased by 30 bips to 22.9% due to price adjustments, particularly in the first quarter, and higher sales contribution of imported products. Meanwhile, EBITDA grew by 12.2% to 4.3 billion. Double-digit upline growth translated to improved operating leverage as fixed costs grew in line with inflation. Next speaker is Tim.

Thank you. Net sales of the drugstore segment grew by 15.3% in the first half of this year to 16.1 billion due to strong sales for sales growth and sales contributions from new stores. Vendor-saved store-filled growth of South Florida drug and gross pharmacy growth rose by 8.2% in the first half. Prescription drugs in particular, maintenance medications, and even over-the-counter cough and cold medicines and antihistamines have underpinned the top one. Gross margin expanded by 90% to 21%, which we attribute to improvement of assortment, price adjustments, and increased penetration of our own brands. EBITDA rose by 11% to $1.4 billion due to the robust top-line trends in gross margin expansion. Now I turn it over to Mina for the department store segment. Thanks, Jen. Department store sales grew by 12.6% in the first half of 2023 to $6.8 billion. S&SG normalized with 11.9% in the first half after slipping by 55.9% in the same period last year. Key category drivers this year are shoes, bags, and sports, cosmetics, and men's and ladies' apparel, which were supported by continued out-of-home activities. Gross margin improved to 30 pips, to 30.8% in the first half, mainly due to the increase in outright sales. EBITDA grew by 4.2% in the first half, to $1,397 million. Double-digit SSSG and expansion in gross margin were offset by higher operating expenses, for key items such as rent, manpower, and utilities, which are back to pre-pandemic rates. Passing you on to Daniel. Thank you, Ms. Minda. For DIY, for the first half of 2023, the DIY segment posted SSSG of 1%, and increased a 1.9% decline in net sales to 5.9 billion pesos. Stiff competition was Challenges in one of our top seven categories is dog food. A decline in demand for pandemic items like cookware and kitchen utensils. And the sale of seven Robinson's Builders stores back to our own J.D. partner weighed on the top line. Competition in the dog food category has increased as more players from S&M East to food manufacturers entered the category since the pandemic started. Excluding dog food sales and the impact of the Robinson's Builders exit, DIY net sales will have increased by 4% year-on-year in the first half of 2022. Meanwhile, we are pleased to note that the first fully-converted Harleman Big Dog store has been able to generate double-digit revenue growth since it was invented late last year. Gross margin for the segment improved to 31.8% in the first half from 30.9% in the first half of 2015. Recall that last year, we started to move out aging inventories, which resulted in a lower gross margin for the comparable year. EBITDA decreased by 27.5% to 595 million pesos last year. due to the decline in net sales, while the OPEX items such as strength, front power, and liquidity are accelerating. And I'll turn you over to Suresh.

Thank you, Tev. Uncle John's net sales rose by 9.5% in the first half of 2023 to a total of 3.1 billion. The top line was driven by 9.8% SSSG, which benefited from the sustained performance of CBD stores, which was slightly tempered by the lower number of operating stocks. Gross margins plus other income expanded by 60 to 39.2% in first half 2023 due to increased contribution of the higher margin AT category. EBITDA grew by 9.6% in first half 2023 to 319 million supported by sustained SSFJ and gross margin expansion. We are also pleased to note that our entire CVS network has been rebranded to Uncle John's. We have also introduced new stock content, which will be discussed in the next few slides. Thank you. I turn it over to the next speaker, Ms.

Mayling. Thanks, Suresh. For the specialty segment, NetSell increased by 6.2%, 7.1% in the first half, with segment efficiency at 4.9%. As merchandise, toys, beauty, and pet retail continued to generate double-digit revenue looms, the top line of appliances and electronics was flattish in the first half, as sales of gadgets and kitchen appliances pleased people, went back to work, and digital commerce sales declined. The specialty segments broadened and expanded by 170 bps due to authoritarian changes coupled with competitive promotional support. for vendors. Meanwhile, EBITDA declined by 9.9% to 546 million due to the reinstatement of full rental rates and higher energy costs. Moving on to working capital, RHI's cash conversion cycle was 25.3 days in the first half this year from 23.3 days last year. The higher cash conversion cycle is mainly due to their inventory base consistent with their score and financial initiatives. On to our balance sheet, we are in a net debt position of $9.5 billion with borrowings of $23.5 billion, driven by the opposition financing for the BPI shares. As of June 30, our debt related to the BPI share purchase amounted to $15.5 billion, down from $17.2 billion last quarter. Despite being in a net debt position, our balance sheet remains very healthy with a net debt-to-equity ratio of just 0.12%. ROA and ROE in the training 12-month phases came in at 3.5% and 6.4% respectively, lower than last year due to the decline in net income to parents, which was affected by forex losses and equity losses from annuities. In terms of capital expenditures, organic CAPEX for each of the main segments in the first half came in at $1.4 billion versus $1.7 in the first half last year. This included renovation costs for Shopwise. 50% of Capex in the first half went to supermarket to support its store rollout program. 13% went to DIY for store openings and for the renovation of the big box stores from Handling and Doing This. Meanwhile, 12% went to drug stores, 11% for department stores, and 7% each for CVS and specialty stores. I'm handing over now back to Mr. Lee. Now allow me to discuss some of our key corporate developments in the last quarter. Last May 15, we launched our first Uncle John's Kiosk to decide what to do with Supermarket Galleria. The Kiosk highlights Uncle John's RTE products. Sales for this new format have been ramping up, especially during weekdays as food traffic increases due to office workers. We also recently reopened the newly renovated store in Galleria under the new cafe concept. Spacious dining areas emphasize the increased more dining transactions and RTE purchases. We are happy to note that GoTime, one of only six digital bank-stated licenses by the Banco Central, continues to gain traction. Since launching last October 2022, they now have 737,000 account holders. They have also deployed 300 bank jobs across Robinson's retail stores. In addition, account holders can cash in and cash out for free across 1,394 deposit and withdrawal locations within our ecosystem. Since the lot, the total number of go-time transactions within RRHI stores has reached 2.5 million, helping drive foot traffic. We also earn commission for each deposit and withdrawal transaction and for every active account that's open in our stores. Provincial 3PL has a 28 economic interests in full time. To support the competitive learning and development of our finance corporate planning classes, we kickstarted a strategic CFO development program in the Asian Institute of Management last July 2020. The program is a former postgraduate executive certificate program assigned to enhance the corporate finance management skills for our finance students. We congratulate 18 of our South Star Grand Gopongwe Brothers Foundation scholars for passing the April 2023 Pharmacist Licensure Examination. Together with the Gopongwe Brothers Foundation, our STEM Scholarship for Excellence supported 183 pharmacy students in scholarships, development programs, and career placements within the group. We are proud to partner with the Banco Central of the Philippines in its effort to bolster the national point the circulation program to the coin deposit machine project. Last June, 2023, one machine was unveiled that profits the supermarket with Robinson Simileon, enabling customers to deposit coins in directly traded equivalent amount to an electronic wallet. Another machine was also deployed at Galleria Latin Lighter. As of July 20, the machines were able to collect 1.74 million points for a total value of 2.6 million. Present at the event were Governor Felipe Pedalla and Deputy Governor Bernadette Bovalo-Puyat and others, Banco Central officials. Officer Supermarket and Savers of Chances recently organized wellness runs, gathering close to 4,500 runners in Kessel City in Papanga. Robinson Supermarket's 15th annual 15th Fun Run is body-run last July 9 at Bridgetown Destination Estate, and around 3,000 runners have raised $700,000 for World Vision's Child Sponsorship Program. We also collaborated with communities organized for resource allocation and scholars of Sustenance Philippines during their run to segregate, waste, and collect and accept food items. On June 10, Safer Suppliances organized Run for the Future, gathering over 1,500 runners at the Clark Parade Grounds in Pampanga. A run was organized to not raise funds for the renovation of the Pulong Kaputut Elementary School's library, as well as to provide educational tools to cement Pampanga scholars. The marketplace recently donated 200,000 pesos to Safe Philippine Seas. The donation will be used by Safe Philippine Seas for their project to educate communities on the value of protecting our marine resources and empower the people to take action for conservation and restoration. Roast Pharmacy opened its 380th store in Larena City Hall last April. As part of the opening activities in partnership with the Siquimor Provincial Tourism and Environment Office, Rose Pharmacy organized the Coastal Peanut activity in Barilla, Siquimor, and in the activity, they gathered 37 sacks of assorted plastic bottles and they reaped. Toys R Us, in partnership with Kids Luna, celebrated World Play Day last May 29th with 50 kids from a non-profit organization, Caritas Manila. Robinson's Department Store in Toysara turned over close to 500 pairs of useful glasses to the Lions Club of Marikino Valley on July 7 for a cycle-versus-cycle Lions Club's International Classic Eye Glass Recycling Program. In 2022, Robinson's and Reusser House also partnered with the Rhymes Club of Marikina Valley for the establishment of the Alliance Eyeglass Recycling Center, which serves as a hub for the eyeglass recycling program. Advancing its mission of responsible pet ownership, the Pet Lover Center donated dogs for the pet care products to VMware One Home for Angels, an animal shelter home to 205 rescued dogs, on May 18, 2023. Now allow me to discuss some organizational changes within our board of directors and senior management. First, I would like to take this opportunity to thank our outgoing director, Mr. Ian McLeod, for his immense contributions to Robinson's Radio since joining our board last November 2018. Ian was the representative of BII BFI Group, We wish Ian all the best in his future endeavors. We are pleased to welcome our new director, Mr. Scott Price, who will succeed Ian in our board. EFI Retail Group recently appointed Scott as their Group Chief Executive Executive August 1, 2023. Scott has over 30 years of retail, logistics, and consumer package good sector experience from around the world. with key management roles in UPS, Walmart, DHL Express, and Coca-Cola. Scott was also an independent board director of Pulse Group in Australia prior to joining the EFI retail group. We have also made some recent organizational changes within our senior management team. We're happy to announce the appointment of Stanley Koh as Chief Operating Officer effective October 1, effective August 1. Stanley has been with Robinson's Vehicle for over 20 years. Immediately prior to this appointment, Stanley was managing director of our supermarket segment, where he oversaw our expansion into under-penetrated areas and omnichannel retailing in over 300 stores across the country. He also previously headed our DIY mass merchandise and pet segment for 12 years. Next, we have appointed Christine Juarez, who has been with South Tar Drown for 23 years, as Group General Manager of Robinson Supermarket Effective August 1. She will also oversee our business with B2B platform Rosari and our franchise with Korean specialty chain No Brand. Prior to her appointment, she was Group General Manager of our drugstore segment. Then we'll work closely with supermarket segment GMs, Herbalisa Bezos of Robinson's Easy Mart and Curly Legarda, Legarda of the Marketplace and Shopwise. Finally, Mariel Grisol-Somol is our new general manager for South Star Drug. She was appointed July 1. She joined South Star Drug in 2003, left after five years, but returned in 2019 as finance director of our drugstore segment. Mariano worked closely with South Star Drug Deputy GM Daniel Sanchez, PGP General Manager Johan Seno Arceo, and Rose Pharmacy Deputy General Manager Michael Sohn. Finally, on our guidance, we are slightly revising our net addition guidance this year to 160 stores, between 160 stores to 190 stores. Note that one of our store openings are normally split towards the latter half of the year. We are still aiming for blended SSSG of 4% to 6%. We continue to guide for 20 to 40 basis points growth margin expansion. And finally, we are earmarking 4 billion to 6 billion for organic capital expenditures. This is in line with the lower store, sorry, sorry, Finally, we are earmarking $4 billion to $6 million for organic capital expenditures. This ends my presentation on our first half updates. We will now open the floor for the Q&A session. Thank you.

Good afternoon. So we will be reading questions that were sent beforehand. But for those who want to ask questions live, you can just use the raise hand button and then we will unmute you. But if you choose this option... please don't forget to introduce yourself as well as identify the company that you are working for. There was actually a question that was sent beforehand. This is from Daphne Cheryl Maybach. Her question is, do we expect the company to book impairment and or write-off in its investment in beauty M&L given the current circumstances?

This is Gina. We would most likely provide for impairment of our investment in Julian and Elle. Right now, the company is looking for a white knight. If we cannot find one, it will be in the second half of this year. Nonetheless, if you are the losses that we will be booking, will be oil and copper from the gain from our investment in Glosal.

Thank you, Gina. So just a reminder for the audience on the virtual floor, if you have any questions, just please send them over through the Q&A chat box. Next question is from Joyce Ramos, CLSA. Can you share the economics of the Uncle John's kiosk and cafe?

What are the plans for expansion for these two formats? Good afternoon, it's Rachel.

Our plan to open another 15 to 20 stores for the kiosk for upcoming months of end of this year, which is five to six in five times the kiosk rating. And cafes, we are looking at stores because we need a higher renovation cost. We are really carefully looking at which are store need to be renovated on the cafe and which are the new stores will be built under the cafe concept. And it was a very initial state which we are trying out these two concepts, kiosk and carry.

And I can still understand it. Okay. Thank you, Suresh. Yeah, there's a follow up from Joyce.

Can you quantify the potential impairment for beauty M&L in the timing?

By that time, we will be doing the impairment amount of a little less than 200, 150, I guess, per year.

Thank you, Gina. Next question is from Teresa Mathai from Hawaii.

How much did your society contribute to supermarket sales in the second quarter and in the first half?

It's now trending at a little less than 10% of total supermarket sales.

Thank you, Gina. We can see two people raising their hands. First one is Matthew Zitan. Go ahead, Matthew, we will unmute you. Matthew? Matthew, you can just type in your question and we'll just read it for the audience to

We can see that Sanam here is also raising his hand. Maybe we'll switch to Sanam first.

Yeah, Sanam. Yeah, hi. Actually, I just wanted to understand, you know, the full year guidance of 4% to 6% same-store sales growth on a blended basis for the consolidated entity. What would be the drivers that one would require for this to come in at the higher end of the guidance given that Q2 we have seen SSGs drop to 3.6% and we have a high base effect of last year in the second half as well. So what is it that the management is seeing that would help achieve the top end of the guidance of 6% SSG for the full year given the Q2 run rate?

Based on the initial trends in July, I think we're seeing a recovery in terms of same-store sales growth to mid-to-high single region. That's the initial. The reason being is that I think for the department store in particular, also in some of our same-store purchases for school opening, we're seeing that already.

So are you seeing a quick revival happening in the department stores here? Because what we saw is that other than the supermarket and drug, all the other segments have not delivered any strong SSG, which has been a drag overall. So do you see in the second half any change in the growth trajectory for the other segments? Or is it going to be a similar way, which would kind of be a drag for the overall SSG?

What we can see is, you know, an improvement just for the first half of July. We don't have the numbers yet for the month of July.

Okay, okay. And in terms of your profitability, you know, when we look at your EBIT margins, which are at around 4.3% for the consolidated level, do we see chances of any expansion in the EBIT margins here? Or do you think that it's, you know, this year it's going to be more of a consolidation where, you know, reinvestment would be required and hence, you know, EBIT at 4.3 is the best case scenario?

It largely depends on the same stress years growth. We require the expansion in GDP margins. However, as you know, I guess you have already, the other retailers have already reported also their results, right? And you can see an elevated OPEX, especially for rent, utilities, and manpower expenses.

So it all hinges on a higher SSG that would actually flow down into EBIT margins expanding. Otherwise, it's going to be at these levels. That's what you're saying?

Yes. Okay. Okay. Okay.

And, and now, you know, just last question before I jump back to the queue, in terms of your, you know, the, the supermarket sales and the drug stores, do you see that, that these SSVs are kind of at an optimum level currently, or do you see that, you know, it can, it can improve further given the, you know, the strategies that we are implementing?

Well,

But for the supermarket company, yes, it should be able to just maintain this one. I guess for the supermarket segment to grow by 5%, 6% is already quite a stretch, considering that this segment is feeling the effect of a lot of downturns.

So just on supermarket, I mean, what was it that led to the SSEs coming down to 3% in Q2 versus the high number in Q1? I mean, we have a blended 5.7. So what was it that led to the SSE coming down to 3%? Was it the high base or?

Yeah, it is a high base. We're coming from a high base last year because of the election year. So, during that time, we had a lot of transactions.

Right, right. So, but the high base would still persist into second half as well, right? So, what gives us the confidence in the second half that we'll be, you know, despite the high base, we'll still achieve a 6%?

Oh, I guess we'll continue to see the high base up until the bottom. a lot of our strategic plans should already kick in. For example, the renovation of our shop-wide stores. One store that's affecting our SSG right now is about to be relaunched by August. So that alone should India is also improving. We're seeing better and more stable supply coming from our foreign vendors. Okay, okay, okay, okay.

Got it. And on the drugstore side?

Yeah, we're looking at sustaining the same sort of deal, given that last year, we had a low base. So, yeah.

Okay. Okay. So, so this kind of a hundred of, you know, uh, 8 billion or can, can improve from your own, uh, to maybe, you know, nine or 10, you know, depending on the, on the expanding stores and depending on the, uh, the demand out there.

Yes. Okay.

All the rest, I'll come back in the queue.

Right. Thank you.

So back to the Q and a box, um, We have a follow-up question from Carissa of Macquarie. So this is on the CVS segment. How much did RTE contribute to sales in the second quarter and in the first half? All right, Suresh.

Our current RTE contribution for local sales for RTE is 38%.

38%. Thank you, Suresh. Our next question is from Stephen Oliveros of China Bound Securities. So may I ask the rationale behind the revised score targets for this year? We always wait for the building to finish. So if a structure is delayed, we're also delayed. All right. Thank you. Next question is from Denise from QualFinancial. Hi, how much of the interest expense in the second quarter was related to financing the acquisition of the BPI shares? For me, around 490. Thank you.

The next question is related to that, but on the dividend side, this is from Fasim. How much dividend income do you expect to receive from BPI this year?

Okay, on an annual basis, around 900. Yeah, close to 100 before

Next one is from Ray near you. Still on the dividend side. He has two questions. The first one, why didn't Robinson Street recognize property divs from the BPI shares or were you not entitled to it?

That's already included in the 950 that I mentioned earlier. All right.

Thank you. My second question is we have seen lower capex a lot in the supermarket segment in the first half. So will this be the normalized level going forward?

That's because our store opens are back-ended. We've only opened 10 out of our 36 budgeted stores so far. But we're on track. We should be able to open all the stores this week.

Maybe we can shift to the... Those who are raising their hands, you can see Carissa Mangubat from Regis raising her hand.

Please go ahead, Carissa. We will now unmute you.

Yeah, hi. Good afternoon. On the DIY segment, the EBITDA margin has been contracting every quarter since for the past maybe six, seven quarters. So can we just get some detail on what's going on there? I understand that you discontinued Robinson's Builders, but is there anything else that's happening in the existing network? And then my second question is more on the parent company. So I missed it earlier, but what is the debt balance at the parent level in the second quarter, as of the end of second quarter. Thank you.

Hi, this is Ted of EIY. Aside from the move out of old inventories, there are also some houseware products that we are also moving out that were very popular during the pandemic.

So this is the reason why there's a decline in our plus profit.

Just as a follow-up to that, where do you expect margins to either EBITDA or GP margins to stabilize moving forward? Or should we expect this to continue contracting?

We're seeing improvement like before because of the holiday season.

Okay, thank you. And then just on the debt, the parent debt, I missed it earlier, but what's the balance as of 2Q?

The balance of the parent debt for the DPI, it's 15.5 billion total for DPI.

Okay, thank you. By the end of this year, where do you expect that to be?

Around 13 billion.

13. Thank you.

Thank you for the questions, Carissa. So we'll move now back to the Q&A box. Next question is from Nadine Bautista of JP Morgan. How much of the 3% SSSG for supermarkets will be driven by transaction count and ticket growth?

Transaction count is up 8.5%. Basket size is down 9.8.

Next question is from Francis of Guido. So has management noticed any tailwinds or increased sales growth coming from higher credit card usage?

Around what percent of sales would come from credit cards? Are you referring to the mix of credit card sales to total sales, or are you referring to the special sales of credit cards? That's the question. Thank you.

So Nadine has a follow-up question, maybe for the benefit of everyone in the call.

So what were the main drivers for We admit the margin compression for the department store and the specialty segments, despite the positive sales growth.

For the department store, it was driven by the entire OPEX, mainly coming from manpower, rent, and penalties.

The same for specialty, generally. All right. Next, from Charmaine 12. So any updates on the BPI and Robinson stock merger? When will this be completed? I think they're targeting the latter part of 3Q to 4Q.

That depends.

All right. Thank you, Gina.

Question again from Carissa Macbayo from Macquarie. Can you share the breakdown of the expected store additions for 2023 by format?

Supermarket, anyway, looking at around 30.

Drugstores, around 100. CES, 20.

And the other one, around 50. And specialty, the violence. All right, thank you, Gina.

Question again from Nadine. Can we have a breakdown of which investments drove the 150-minute equity losses in the second quarter.

Our cost of it came from GoTime, which is a startup. But GoTime is expected to break even with 2025.

All right. Thank you, Gina. Yeah.

So just a reminder for those who still have questions, please send them over through the Zoom Q&A facility, or you can just raise your hand. I have a question here.

something just said lead independent director just asking for who is the lead independent director for the company yeah all of them are lead independent directors all right thank you so much um

Next question from Miguel Reyes. So good afternoon and thank you for the presentation. So what drove the 73 million pesos in Forex losses? Do you hedge against or do you hedge your FX on exposure?

It's just the bond and equity holdings. We do not hedge against FX exposure if we're asking about like importation. This is very small relative to our purchases.

Thank you. Next question from Rainier Yu.

Just a clarification, is the 490 million interest expense for the BPI shares for 2Q 2023 or the first half of 2020?

It's first half, so I'm just divided by two for you.

Thank you.

When can we expect increase in OPEX shares? sales to stabilize, OPEX to sales to stabilize?

It should stabilize starting next year. Okay. Thank you, Gina.

So at this point, sorry, another one, there's another question from Luis. Are HR and animal stockholders meeting 2024 is back in face-to-face hybrid?

We haven't talked a bit. What do you suggest? Great. Thank you.

So at this point, there are no more questions from the floor, and we can now end this level of simulation.

Thank you, everyone. We'll see you at the next earnings poll.

You know it's the next. Thank you.