Good afternoon, everyone, and welcome to the Evertec Second Quarter 2024 earnings conference call. At this time, I would like to turn the conference over to Ms. Beatriz Brown-Saenz of Investor Relations. Please go ahead, ma'am..

Thank you, and good afternoon. With me today are Mac Schuessler, our President and Chief Executive Officer; and Joaquin Castrillo, our Chief Financial Officer.

Before we begin, I would like to remind everyone that this call may contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC report.

During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules, such as adjusted EBITDA, adjusted net income and adjusted earnings per common share.

Reconciliations to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides, which are available in the Investor Relations section of our company website at www.Evertecinc.com. I will now hand the call over to Mac..

Thanks, Beatriz, and good afternoon, everyone. We're pleased to announce second quarter results that reflect solid revenue growth across all our segments and strong overall margins.

Revenue continues to benefit from strong transactional growth in Puerto Rico and Latin America, complemented by the contribution from the Sinqia acquisition as well as higher-than-expected revenue in our Business Solutions segment.

I will begin today's call with a summary of our second quarter 2024 financial results, followed by a discussion of our Puerto Rico segments and concluding with an update on Latin America, including progress we are making with Sinqia and Brazil.

I will then turn the call over to Joaquin, who will provide additional details on both our Q2 results and our updated 2024 outlook. Beginning on Slide 4, let's start with some highlights from our second quarter results. We reported $212 million in revenue, a 27% increase over the prior year.

Revenue growth in our Puerto Rico Payments segment was driven by strong sales volume growth, improved net spread and continued growth in ATH and ATH Mobile business. Latin America revenue benefited from the Sinqia contribution as well as continued organic growth across the region.

Business Solutions revenue benefited from a onetime impact from a project in the quarter. Adjusted EBITDA for the quarter was $86.1 million, up approximately 16% when compared with the prior year, driven largely by the revenue increase and the effect of the Sinqia acquisition.

Adjusted EBITDA margin was 40.6%, down from a year ago, driven by the lower margin profile of the Sinqia business. However, the margin was above last quarter due to the revenue growth driven by the payment segments and the effect of the onetime impact in Business Solutions.

Adjusted EPS for the quarter was $0.83, up 17% year-over-year and above our expectations with a higher revenue, strong margins and lower-than-expected tax rate all contributing to the upside.

EPS was partially offset by higher operating depreciation and amortization expense and higher cash interest expense as a result of the incremental debt raised for the Sinqia acquisition.

We continue to actively manage our cost of debt and as announced back in May, we completed the successful repricing of our Term Loan B, which was leverage neutral and effectively reduced our interest rate by 25 basis points.

We are pleased with the resulting future interest cost savings and believe this reflects the high confidence level that debt holders have in Evertec.

We generated operating cash flow of approximately $131 million during the first half of the year, and we returned significant cash to shareholders, approximately $6 million through dividends and $70 million through the accelerated share repurchase program.

We completed the ASR on July 9 and retired a total of approximately 1.9 million shares through the program. Our liquidity remains strong at $452 million as of June 30. Turning now to our Puerto Rico update on Slide 5. Just like in the first quarter, all of our Puerto Rico segments generated strong growth.

Merchant Acquiring led the way with approximately 10% growth on a year-over-year basis, benefiting from sales volume growth and a higher spread. Payments Puerto Rico revenue grew approximately 7% year-over-year.

The Business Solutions segment delivered strong performance, up approximately 9% year-over-year due mainly to the onetime revenue impact to the segment, which was 100% margin accretive. The Puerto Rico macro environment continues to be supportive for Evertec as we move through 2024.

As we have noted on other calls, there continues to be a significant amount of federal funds committed, and we're beginning to see the disbursement of these funds accelerate. The employment picture remains strong with total employed up 1.8% year-over-year and the unemployment rate at 5.8%, still near the lows of the past decade.

Tourism remained a positive factor with arrivals to the international airport in San Juan, up approximately 18% year-to-date, and nonresident hotel registrations are up 4.4% year-over-year through April. In sum, the macro backdrop continues to be supportive of continued organic growth for Evertec. Turning to Latin America on Slide 6.

LATAM revenue was up 91% year-over-year in the quarter with the acquisition of Sinqia being the major driver of growth, and we continue to see organic growth from our legacy business that remains in line with historical growth trends.

In Brazil, we have seen some softness in the software market that has impacted Sinqia as well as other technology providers. However, we continue to focus and have made progress on the five areas that we laid out last quarter, which we are confident will increase Sinqia's growth rate.

We continue to be excited by the prospects of this business as we interact with more clients, the strength of Sinqia's position in the market and the strength of the franchise remains clear.

Additionally, we are starting to see progress from the combination of Evertec and Sinqia as conversations with clients, both new and existing, begin to get broader in terms of potential service offerings that include Evertec asset, which is also encouraging.

Let me conclude by emphasizing that we are very pleased with the overall performance we delivered in the first half of the year. We remain enthusiastic about our long-term prospects throughout Latin America and believe the Puerto Rico economy will continue to support our growth in this market. With that, I will now turn the call over to Joaquin..

Thank you, Mac, and good afternoon, everyone. Turning to Slide 8. I'll begin by reviewing the second quarter results for Evertec. Total revenue for the second quarter was $212 million, up approximately 27% compared to the prior year.

Our Latin America segment benefited from both the Sinqia acquisition and organic growth in our legacy business and our Puerto Rico segments reflected good organic growth that benefited from an improvement in overall spread, high transaction volumes, continued growth from ATH Movil Business and the project-related onetime impact in Business Solutions.

Adjusted EBITDA for the quarter was $86.1 million, an increase of approximately 16% from the prior year, and adjusted EBITDA margin was 40.6%, down approximately 400 basis points from the prior year. The decline in margin is primarily the result of the Sinqia business, which has lower margins.

Adjusted net income was $53.8 million, an increase of approximately 15% year-over-year and adjusted EPS was $0.83, an increase of approximately 17% from the prior year.

This growth was driven by the higher adjusted EBITDA and a lower-than-expected tax rate, partially offset by higher interest expense resulting from the increased debt raised to finance the Sinqia acquisition as well as higher operating depreciation and amortization.

The adjusted effective tax rate for the quarter was 4.4%, which is below our original guidance and mainly driven by tax benefits related to the Sinqia acquisition. Moving to Slide 9. I will now cover the second quarter results by segment, beginning with Merchant Acquiring.

Net revenue increased approximately 10% year-over-year to $45.3 million, driven by increased volumes and an improvement in the overall spread. We experienced mid-single-digit sales volume growth in the quarter, with growth across most major categories in our portfolio as we have signed new merchants combined with strong consumer trends.

We also continue to actively manage our overall spread through several initiatives as well as repricing certain key relationships. Adjusted EBITDA for the segment was $18.2 million, and adjusted EBITDA margin was 40.3%, up approximately 230 basis points from the prior year.

The margin increase was primarily due to the higher revenues, partially offset by increased expenses, particularly higher processing costs, driven by the effect of a declining average ticket. On Slide 10 are the results for the Payment Services, Puerto Rico and Caribbean segment.

Revenue in the quarter was $54.2 million, an increase of approximately 7% from the prior year. The revenue increase was driven by high teens growth in ATH Movil Business, a 5% growth in POS transactions and higher transaction processing and monitoring services provided to the LATAM segment.

Adjusted EBITDA was $31.4 million, up approximately 7% from the prior year, and adjusted EBITDA margin was 57.8%, up approximately 40 basis points over the prior year. The increase in margin was due primarily to the increase in revenue, partially offset by higher infrastructure and programming expenses and personnel costs.

On Slide 11, are the results for Latin America Payments & Solutions. Revenue in the quarter was $74.7 million, up approximately 91% year-over-year. Normalizing for the effects of foreign currency, this quarter growth would have been 9%.

The biggest driver of the increase was the addition of revenue from the Sinqia acquisition and growth in our legacy LATAM business, which was low double digits. Adjusted EBITDA was $17.5 million, up approximately 24% from the prior year, with the adjusted EBITDA margin of 23.4%, down approximately 13 percentage points from the prior year.

The decline in margin is mostly a result of Sinqia, which has lower overall margins when compared to the segment average and the positive impact to margin in the prior year from the reversal of a onetime provision for operational losses.

Margin for the segment was also negatively impacted by higher salary expense related to both headcount increases and currency movements in certain countries. Turning to Slide 12. You will see the results of our Business Solutions segment. Revenue was $62.3 million, an increase of approximately 9% from the prior year.

The revenue increase was primarily driven by a onetime impact of a multiyear project in the quarter. Adjusted EBITDA was $29.8 million, up approximately 27% from a year ago, and adjusted EBITDA margin was 47.8%, up approximately 670 basis points from the prior year.

The stronger than expected margin was due to the onetime revenue impact, which was highly accretive as well as lower expenses. Moving to Slide 13. You will see a summary of our corporate and other expenses.

Corporate and Other adjusted EBITDA was $10.8 million in the quarter or 5.1% of total revenue, up $2.6 million from the prior year, in part due to higher personnel, legal and professional services and other operating expenses, but still within our expectation of 5% of total revenues.

Moving on to our cash flow overview for the first half of 2024 on Slide 14. Net cash from operating activities in the first half was $131 million.

Capital expenditures were $56 million through the second quarter as we had front-loaded CapEx spend driven by key projects being developed and key infrastructure refresh that took place during the first half of the year. We now expect our total CapEx for the year to be closer to $85 million.

We paid down approximately $19 million in debt during the first half and returned approximately $76 million to shareholders through share repurchases and dividends. As Mac noted earlier, on July 9, we completed the $70 million ASR that we had announced in the first quarter, retiring approximately 2 million shares as part of that plan.

Recall that we entered into the ASR to offset the dilution from shares issued as part of the Sinqia acquisition. We currently have $150 million available for future use under the company's share repurchase program through December of 2025. Our ending cash balance for June 30 was $282 million, a decrease of $36.5 million from the year-end 2023.

Moving to Slide 15. Our net debt position at year-end was $735 million, comprised of $993 million in total loan and short-term debt, offset by $258 million of unrestricted cash.

Our weighted average interest rate was approximately 7.2% higher than a year ago due to the debt issued related to Sinqia acquisition, but lower than recent quarters, due in part to the repricing of the Term B loan that Mac mentioned earlier, which reduced our spread by 25 basis points.

Our net debt to trailing 12-month adjusted EBITDA was approximately 2.28x, up from 0.86x a year ago, but still well within our target range of 2x to 3x. As of June 30, our total liquidity, which excludes restricted cash and includes our borrowing capacity, was $451.7 million, up $66 million from a year ago.

Now, I'll turn to Slide 16 for a commentary on our updated 2024 outlook. For 2024 revenue, we are keeping the same expected range of $846 million to $854 million or growth of approximately 22% to 23% over the prior year. On adjusted EBITDA, we now expect our margin to be around 39% for the full year.

Adjusted EPS is now expected to be in a range of $2.98 to $3.07, which represents growth of 5.7% to 8.9% compared to the $2.82 reported for 2023.

This updated range considers our Q2 results, lower interest expense driven by the TLB repricing and overall lower adjusted tax rate of approximately 5% for the full year, which is down from our prior target of 6% to 7%.

As a reminder, the lower tax rate has been mostly driven by the effect of amortizing goodwill for tax purposes in Brazil, which have reduced our tax liability.

In terms of the segments, we now expect our Merchant Acquiring segment to be in the mid- to high single-digit range as we expect the second half of the year to have growth more aligned with our first quarter results and our Payments Puerto Rico segment to be in the mid-single-digit growth range.

For Latin America Payments & Solutions, we now expect growth in the high 60s to the low 70s percent, taking into consideration the effects of foreign currency, which continued to impact year-over-year growth, mainly as a result of the Brazilian Real. We expect Business Solutions revenue growth of low to mid-single digits for the full year.

In summary, we are pleased with our results thus far in 2024, and we believe Evertec is well positioned for growth in 2024 and beyond. The integration of Sinqia will remain a major focus, and we continue to be excited by the long-term opportunity in both Brazil and the rest of LATAM.

We look forward to updating you on our progress in the coming year and hope to see some of you at conferences over the next few months. With that, operator, please open the line for questions..

[Operator Instructions] And first question will come from Jamie Friedman with Susquehanna..

Congratulations, good results here. I just wanted to ask first about the Puerto Rico update, Mac. You're calling out improved spreads and transaction growth.

I'm wondering, in terms of the spread narrative, how sustainable do you see that? What's that due to? And are you anticipating it will continue?.

So, look, I think we've been consistently saying that we're very focused on the pricing in our merchant portfolio, and this is something that we've been actively doing. What I would say is this started -- or some of these initial started last quarter. We're starting to see some of the impact this quarter.

So, we are expecting to see some of that, let's say, benefit from pricing throughout the end of this year. And then we'll never say you that as we get into next year.

And this is something that we do, both looking at different segments in the portfolio, specific relationships within the portfolio that maybe don't have the level of profitability that we want and also making sure we're optimizing the cost that we get from some of the brands. So, this is something that we'll continue to do.

But these specific initiatives, we expect will run throughout the end of this year. And in terms of impact, which I think is also something that we usually give some color around, it's about 1/3 of the impact to growth is from pricing.

About 1/3 is coming from sales volume growth and about 1/3 is really coming from some non-transactional fees that are kind of cyclical. So those we don't necessarily expect on a quarter-to-quarter basis..

And then for my follow-up, how is legacy LATAM due and working? I know you say that the organic growth in the legacy business was in line with the historical -- make sure I'm looking at the right thing. Yes, that's what it says.

But then I thought that you had said in your prepared remarks that -- you gave a number, it seemed like it was lower than what I had remember. Anyway, any context about legacy LATAM would be helpful..

Sure, Jamie. We said it continues to grow low double digits. And we've historically said we want that segment to be in that low double digits to low teens, which is kind of the base at which some of those markets are growing at and that continues to be our focus..

Yes, this is Mac. To be clear, we're not breaking out Sinqia and LATAM because we don't manage the business that way. But to Joaquin's point, the legacy business is growing at the same rate it has historically in the most recent quarters, and that's outperformed in this quarter as well..

The next question will come from Vasu Govil with KBW..

I guess, I wanted to start off with Sinqia little bit, Mac. I heard you mentioned some softness in the software market in Brazil.

Just can you provide an update on sort of what type of growth you were expecting in that asset? And how meaningful of an impact you're seeing in the market and if there are things that you can do to offset that in the near term? And I know Joaquin gave us some LATAM guidance for the third quarter as well, which seemed a little bit softer.

So, is that because of the software weakness? Or is it all facts related?.

So, the [indiscernible]. Let me walk you through a little bit about what we're seeing in the industry. So, when we look at public companies that are in this sector, and we also look at private companies, both through our CVC and through our M&A pipeline, we have seen a slowdown in their growth rates.

And it's really attributed to sort of the political situation as it relates to the Lula administration and sort of concerns around populism and increasing fiscal spending without being sort of -- in raising the deficit. And that's what you've seen in the impact in the Real.

You've also seen the impact in inflation and then you've seen impact in corporate spending. So, when you look at our service lines within Sinqia is where we've seen that the most pronounced. People are sort of buckling up and holding -- they're spending down to see what's going to happen.

We are optimistic that Lula realizes he can't have the Real depreciate as much as it's done and that he can't have inflation go up. He's even -- his administration has made commitments for '24 and '25. I mean for '24 and then going into 25 to cut, I think next year, like BRL 26 billion in expenses to try and get the budget balance.

So, we have seen that, like I said, in other companies, both private and public, and that has slowed down in spending with some of our customers. That being said, we also, as we said on the previous call, are very focused on executing well and making sure that we can reaccelerate the growth rate based on our own initiatives.

So, we spend a lot of time with customers, making sure we're staying close to customers, resolving issues quickly so that we can cross-sell them new business, also modernizing our platforms and moving them to the newer versions. And what I would say is it's early, but we are seeing very promising signs that customers are willing to do more with us.

If we modernize the platforms, if we solve their problems on the existing platforms and SLAs, and we think this is one of the best assets in the country, it would be very difficult to replicate. The stability of the services they provide, the strength of the software across different lines within a bank or a financial institution.

So, we're very focused on making sure we have operational excellence as we've done with the rest of Evertec..

And then just my quick follow-up.

The Business Solutions outperformance related to that onetime project, was that expected to be -- to fall in the quarter? And if not, I'm just trying to put that with the unchanged revenue guide?.

So, it wasn't. It's a timing issue, really. We knew some of it was going to fall this year, but we were ensuring which quarter or it really goes there is some delivery attached to when that one time ahead. And in this case, it was this quarter..

The next question will come from Cris Kennedy with William Blair..

Mac, is there any way to give a time line on the modernization efforts at Sinqia? When do you think you'll have the platform ready?.

Yes. So, look, I would say we're seeing the immediate benefit of the investments we're making now. I mean, I've had some calls with custom customers this week, and they already see a difference in our ability to deliver and our ability to provide better services and our ability potentially to displace some of our competitors with some of our products.

The modernization is going to be a multiyear project, but we're already in the process of modernizing our receivables platform, our funds platforms and delivering this year to some of our biggest customers. So, it's already in progress.

We're just prioritizing those that have the best financial impact and are the most meaningful to our most important customers. So, we get to those first. Secondly, we're also looking at pricing. Like some of these contracts with these customers are very old.

So just like we've done with the merchant business that we talked about earlier, like is there a better way to price some of these contracts as we've added new features.

So, there's a lot of different things that we're doing, just like we've done at Evertec to make sure we deliver on the modernization with good business cases and time the most important ones sooner.

But we're also looking at margin optimization and other revenue synergies, whether it's pricing or -- again, we're already in the process of finding some new payments opportunities now that we have the Sinqia Rolodex, but looking in selling other payment products into the existing Sinqia customers.

So, it's a broad range of things that we're very focused on, not just the modernization, but we have a plan that should impact next year -- the back half of this year and next year and into the future..

And then just for the follow-up.

Can you talk about the M&A pipeline for Sinqia? Is that kind of on hold? Is that on hold or is that you still moving forward with that?.

So, what I would say is we have -- we're very optimistic about the M&A pipeline. We look at the pipeline across the entire geography, not just singularly Brazil.

We're focused on where we can pick up potentially new products, where we can expand the depth in some other markets even outside of Brazil, and where we think we can get the best growth rate and the best return. So, we do have a good pipeline, but we're not just focused on Brazil. We're focused on the other markets as well..

Your next question will come from Nate Stevenson with Deutsche Bank..

Kind of a two quarter maybe on the acquiring business. So, there's obviously been a lot of focus in the payment space the last few weeks on the trajectory of volume growth into the back half of the year. So, I think you called out mid-single-digit growth in your acquiring business this quarter.

So maybe you can give an update on what you've seen so far in July? And any callouts with regards to the cadence of growth as you move through the rest of the year? And then the follow-up there is, you did raise the acquiring segment guide from mid-single-digit to high single digits.

And I think some of your back half assumptions were a little higher than we had previously been modeling. So, any more color there would be helpful..

Sure. I mean I think that the guidance takes into consideration the performance of this quarter, which was certainly a little bit higher than what we expected as well. I think that if we look at kind of trends in July, July sales volume is slightly slower than the trend that we saw for the second quarter, but that is somewhat expected.

If you look at some of the trends that we at least had, for example, last year, and that's in part because we have tax season here during the second quarter, and there's a lot of volume that flows through our systems as a result of that. So, look, in general, I think it's pretty stable.

What we're seeing in terms of that slight slowdown is somewhat expected..

And for the follow-up. I guess, maybe you can you talk about margin leverage you have going forward. So, like if you exclude LATAM, which is obviously impacted by Sinqia, every other segment showed really healthy year-over-year margin expansion. Maybe Business Solutions benefited from the onetime.

But beyond that, there was really good margin expansion across the business. And I know you've kind of alluded to it a few times on this call about your margin optimization efforts.

So maybe you can give us an update on how you think about your ability to continue expanding margins in the legacy Evertec business, leaving aside the Sinqia integration impacts and then how that's changed from maybe 12, 18 months ago and how do you see that going forward?.

I think that we have always been very focused on our margins, right? And we have very strategically taken certain actions, right, that have impacted our margin like the Popular deal in 2022, the acquisition of Sinqia last year. And so, I think that this is a constant for us where we're trying to identify where we can find some efficiencies.

Obviously, our payment segments in Puerto Rico are very scalable. So, to the extent that we can drive good growth through those, including some of the pricing initiatives, which are highly accretive to margin. That certainly helps in Business Solutions.

Look, the margin that we had this quarter is certainly above the norm, and that's why we continue to expect the margin for Business Solutions to come back to that low 40s margin because we had this onetime impact that was highly accretive.

But as we've also said with Latin America, and as Mac mentioned in the last call in terms of the 5 hours of focus, margin optimization as a whole continues to be a focus for LATAM. So, if we're able to start to drive over time, some improvements in margin there, that will be that will be very helpful as well..

The next question will come from John Davis with Raymond James..

Actually, Joaquin did want to follow up on the margin question. So, it looks like on an absolute basis, second half margins are going to be a touch below first half margins. I know you called out average tickets.

Anything else, maybe some conservatism or just the fact that you did get that onetime project in Business Solutions, I'm assuming came with pretty high margins in 2Q? Just trying to think about first half versus back half margins..

No, I think you hit it on the head. It's basically -- if you normalize the margin for the impact of the contract, which is about a full point of margin, by the way. So, if you normalize for that, the second half of the year actually looks pretty aligned to the first half. So there's nothing really there to call out, John.

Again, this is an ongoing effort..

And then, Mac, just taking a step back with Sinqia. I think results have been a little bit softer than you probably expected when you acquired it.

And I'm just curious if you could help us think about what's macro? I know you talked about softness amongst peers and kind of software spending, with the government and everything else that's going on in Brazil versus some micro issues. I think you've called out some of the integration and stuff initially didn't go quite as you had hoped.

So just help us think, if we just take a step back, we're 6 months or so or a little bit more into this deal.

I guess, at this point, help us just kind of parse out like without necessarily numbers, think about how -- what's macro versus micro with Sinqia? And kind of how you think about that changing as we go forward into the back half of this year into the '25?.

I think there's -- the macro has an impact, obviously, and it has an impact across the peer group. But we do have the opportunity regardless even if the macro remains challenged. Again, we're optimistic that IT spending will return.

But even without that, we think there's an opportunity going into the back half of this year and into next year to accelerate growth.

What we have done and going to repeat a little bit of what I said earlier is the time that I've spent with the customers and the team is spending with customers, we are one of the most reliable software companies in Brazil. There's a lot of localization required because of regulation, because of taxation.

And we are one of the largest software companies there, and we're even more reliable because [indiscernible] Evertec, right? We go -- we service U.S. banks, which gives a certain level of comfort. We have a strong information security capability.

So, the conversations we're having about, okay, we need to improve some of our SLAs and the current things that we do. We need to modernize these platforms. And when we do that, we should be able to charge them more and eliminate costs as we consolidate some of these platforms.

But they're also interested in, okay, as you do these things, and they've already -- some clients have expressed to me, they've already seen a noticeable difference in our level of execution, then they're interested in us potentially doing other things, right, because we have the other platforms that we can provide to them to potentially they're using a competitor.

So, I do believe it would be helpful, right, to have the macro as a tailwind. But even barring that, I believe we can reaccelerate growth into the back half of this year and then really into next year for the business. It is -- like I said, it is a very unique asset.

We do business with the largest institutions in the country, and we're still incredibly optimistic..

Your next question will come from James Faucette with Morgan Stanley..

Asking a question on behalf of James. So, it was good to hear you mentioned that you're already seeing the immediate benefits from Sinqia and hearing positive feedback from customers, while also mentioning some Brazil softness.

So, I wanted to understand how the competitive landscape and intensity may differ in Brazil relative to Puerto Rico? And if that might change your go-to-market strategy at all with the bigger presence in LATAM?.

So, what I would tell you is Brazil is a complicated market. And one of the reasons we made a big acquisition in Brazil is because we wanted to have a management team that had depth and breadth.

We wanted to have a Rolodex of committed customers with a lot of experience, and we wanted to buy a portfolio of products where we actually own intellectual property. It was already operational.

And when you look at the competitive landscape, as I said a little bit earlier, a lot of several of our customers that we're talking to are interested in doing business with us on the other platforms as they see us improve on the current platforms that they're running on. So, I would say it's similar to Puerto Rico. Puerto Rico, we have more of a U.S.

presence with some of the ISOs coming in here. But again, because they don't have the local capability and scale that we have in Puerto Rico, we're able to win and grow market share here. It's a very similar phenomenon there.

We have a very unique asset that has scale, that has presence, that has IP, that has experienced management team and software on the ground, that is unique to the Brazilian market. And so, it's similar in that way. They're both unique assets that have competitive advantages in their own markets..

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Mac Schuessler for any closing remarks. Please go ahead..

Thank you. Again, I want to thank everyone for joining the call today, and we look forward to seeing you at conferences over the coming months. Good night..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..