In their Nine-Month 2024 Results Presentation, Tecnicas Reunidas (BME:TRE) (TR) showcased strong financial performance and operational milestones. Chairman Juan Llado and CEO Eduardo San Miguel reported a record backlog of €12.4 billion, driven by a quarterly intake of €4.1 billion. Revenue for the first nine months stood at €3.2 billion, with an EBIT of €131 million and a net cash position of €298 million.
The company also highlighted significant project awards and a strategic partnership with Sinopec (OTC:SHIIY). TR's workforce expansion and their receipt of the Top Employer 2024 certification have positioned them well for future growth. Looking forward, TR anticipates sales of €4.5 billion and a solid EBIT margin of 4% for the year, with a focus on petrochemical sector and low carbon technologies.
Key Takeaways
- TR's quarterly intake reached €4.1 billion, contributing to a record backlog of €12.4 billion.
- Revenue for the first nine months was €3.2 billion with an EBIT of €131 million.
- Significant project awards included a €100 million petrochemical project in North America and a €1.2 billion gas compression plant for Saudi Aramco (TADAWUL:2222).
- TR's workforce increased by 20% in Spain and nearly tripled in India.
- Q3 revenue hit €1.1 billion, a 10% increase in EBIT year-over-year, and a 58% rise in net profit.
- The company aims for €4.5 billion in sales with a 4% EBIT margin for the year.
Company Outlook
- TR projects a 4% EBIT margin for 2024 with expectations for growth in sales and margins in the following years.
- Sales target of €4.5 billion set for the year with a strategic focus on working capital management.
- Optimism about future trends, particularly in the petrochemical sector and low carbon technologies.
Bearish Highlights
- €172 million in services awarded with limited immediate revenue impact; significant results expected by 2026.
- Cautious optimism regarding U.S. market opportunities under the new administration.
Bullish Highlights
- Net cash position grew by 23% to €298 million, with equity increasing by 19%.
- Low carbon technology sales increased significantly, rising from €25 million to nearly €94 million year-over-year.
Misses
- Delivery of services awarded will take a couple of years, delaying revenue contributions.
- Declined to provide a detailed breakdown of low carbon technology sales until year-end results.
Q&A Highlights
- Relationships with Sonatrach in Algeria are improving, fostering project progress optimism.
- Shifts in steel sector decarbonization strategies noted, with a move from hydrogen to carbon capture.
- Despite an increase in accounts receivable, the company is experiencing overall improvement in cash flow and balance sheet figures.
- Management stressed the need for ongoing financing due to project management complexities.
Tecnicas Reunidas (TR) has demonstrated resilience and strategic growth in the face of global market demands. With a robust backlog and a strategic focus on project execution and client satisfaction, TR is well-positioned to capitalize on opportunities in the evolving energy and infrastructure sectors. As the company navigates the complexities of project financing and working capital dynamics, it remains committed to maintaining profitability and cash flow. Investors and stakeholders can anticipate the next earnings update by the end of February, which will include audited year-end numbers.
Full transcript - None (TNISF) Q3 2024:
Operator: Good afternoon, and welcome to TR's Nine-Month 2024 Results Presentation. We will be conducted by our Chairman, Juan Llado; and our CEO, Eduardo San Miguel. It will last approximately 20 minutes, and we'll be able to post your questions after our final remarks. I now leave the floor to our Chairman, Juan Llado.
Juan Lladó: Thank you very much, Antonio. And good afternoon to everyone. Sorry for being here with you this late. We had a morning with customers nowadays happens often but not always on a Friday. As usual, Eduardo and Miguel and I will walk you through today's presentation. And first, I will provide a very brief overview of the main figures of our performance for this first nine months. Second, I will get more in detail of the risk and commercial performance of this period and then Eduardo will update you with the various milestones achieved by TR in our operations, in our delivery of projects, and then we will continue with an overview of the financial results. And as usual, I will wrap up with our guidance for 2024. And let me go through the highlights. First one, our quarterly intake, which obviously includes the announced awards, stands for €4.1 billion. If you all remember, we always had the question of whether we were going to be able to replace sales with new awards this 2024. And I guess that with these new awards, this is not a challenge anymore. The second important number is backlog. This order intake translates into a record backlog of €12.4 billion, which is the highest number we have ever reported. This is important, but most important is to emphasize the quality of this backdrop. Most of it, and if you review them one-by-one, has been awarded to us together with a strategic partner, strategic partner which allow us to focus ourselves on the quality and the access of execution and good risk management. Third, our revenue for this third quarter, it's the first nine months of the year have amount to €3.2 billion. Getting those breakouts to the -- our target and guidance for the year, which has translated into an EBIT, which in our business is our operational margin of €131 million, implying a 4.1% marginal sale, which is on the environment on the neighborhood of our target of our performance targets and our guidance. And as well regarding our net cash position, we have closed this period with a consistent level of cash of €298 million. I think those are five numbers, but very important and solid five highlights the numbers. And now, let me go through and elaborate more in detail their commercial performance. This is a slide, which is -- get into detail, is not the purpose of capacity. You get into detail our performance for the nine months which has been the result of a good strategy and good market trends. First, as you may recall, in July, we were selected by a major chemical customer, which still we cannot release the name until we cannot release the name for more than €100 million in a petrochemical project on a service basis in North America, very much within our strategy. We're very much within our south strategy, which is what we have announced to you presented to you in our Capital Markets Day. We are already fully engaged with the task force integrated with our customer here in Madrid adding value to this very important job. Second, furthermore, we also announced in July that Saudi Aramco awarded to the joint venture of TR and Sinopec, the development of three gas compression plant at Jafurah. Our stake in the job is 60%, which amounts of a bit more than €1.2 billion, a very important job and a strategic job for us obviously and for Saudi Aramco. Additionally, we have been awarded more than €72 million in other service contracts, cost plus contract, front end design, competitive fees and other engineering jobs for various customers here in Spain, in the U.S., and where we have a strong presence in the Middle East. Covering a wide range of products, which starts in low carbon projects, petrochemicals as well as natural gas. In last September, I'm sure you recall that a consortium led by KazMunayGas, awarded the development of an ethylene cracker again to the joint venture on a 50%-50% basis of Tecnicas Reunidas and Sinopec. This is a very important job because of the customer, because of the product, because of the region, and because of our strategic partner, and I will elaborate in more detail in my next slide. As [indiscernible] as it happens now more and more often, clients start asking us to mobilize into the project, obviously getting paid, organized the workforce, started the job and planning the kickoff meeting, which is exactly what we have announced today. This is the announcement of the large three combined cycles. Unfortunately, we cannot disclose the specific details of this job, but it's important to clarify that we have already been engaged with the three combined cycles that the amount is €11.5 billion and it's in the Middle East. In summary, the order intake for this period is €4.1 billion, which translates as a check before into a backlog of €12.4 billion. Now let's spend a few minutes or a couple of minutes, no more than that, on the KazMunayGas award. On September 18, the construction, which was led by KazMunayGas, a Kazakhstan state-owned oil and gas company, together, which as we see in this case, it helps the customer with a 30% stake, Sinopec awarded the development of a steam cracker unit to the joint venture of ourselves the [indiscernible], and they’re Chinese partner, strategic partner, Sinopec. This contract or this award is part of our strategic agreement with Sinopec and is already the third job awarded Técnicas Reunidas and Sinopec together, which is important. In this case, the joint venture partners TR choose Lummus Technologies, is extremely well-known U.S.-based company, with whom we have worked for years, some of you may not know that we partner of TR Lummus in the 60s. In this case, Lummus is the technology licensor for the steam cracking unit. This decision underscores the emphasis of lasting strong proven technologies, which will work extremely well for to develop and grow in the petrochemical sector. This is an ethylene cracker, a stream cracker, and there are not that many companies, which can perform, design and commission this type of petrochemical plant. This cracker, which is a critical component of as I said before, of any petrochemical complex, we utilize natural gas source from the gas system's development fields and eventually would generate a variety of petrochemical products to the local market, and also the export throughout the geography, manage by KazMunayGas and the state of [indiscernible]. And in this slide, I wanted to put emphasis on our service business. When we say €172 million of services compared with the full billion of awards, you might think it's not important. This is extremely important. And this is a demonstration that our SALTA strategy is already paying off. And we are continuously strengthening and dedicating our service-only unit, product and services. This shift to services reflects the forwardness of the growth demand for this type of services, engineering services. We have been driven by an increasing number of assignments of our clients who are entrusting more and more TR at the very early stages of the project of their investment, starting with projects and pitch. For the contracts, it's a clear demonstration of our focus and commitment of our service backlog of our service units. You have to compare that our 40 contracts due compared with 27 a year ago, put big jump. And it shows only dedication of TR for customers and to this business. This includes projects as FEEDS per FEEDS, mixed heat engineering scope, feasibility studies, technology assessments, many initiatives many and lots of initiatives related to low carbon ammonia, fuels and carbon capture technology in the U.S, Europe and in the Middle East as well. It's important also to mention, and it's not a contract, but it's a memorandum. It's very important for us that the recently was announced, publicly announced. The memorandum of understanding that we reached with Exxon to provide a comprehensive carbon capture, transport and storage service contract. This is the very beginning, the early beginning of a long trip together. And after these slides, Eduardo will drive you through and then update you with the recent operation performance.
Eduardo San Miguel: Okay. Thank you, Juan, and good afternoon, everyone. As Juan says, let me give you an update on the operations performance of this period. If we talk about performance, we have to talk about project delivery. So let me first elaborate on two projects where we have already achieved some of the final milestones. The first one is the Bu Hasa project for ADNOC Onshore. TR has recently reached the mechanical completion of the main plant unit, which is a crucial step forward as we progress on the startup of the new compression facilities. Bu Hasa is a €1.5 billion lump sum project that was awarded in late 2018. The project included an oil gathering system, a number of state-of-the-art gas compression facilities and an extensive network for water injection units. The complexity of the project had to do with being a multisite project. In fact, the project facilities were disseminated in a vast area of approximately 176 square kilometers with more than 191 sites. The project has also been another good example of our commitment to the highest safety standards in the industry. Notably, this project has reached an extraordinary safety performance with 72 million safe man hours logged. It is the highest safety achievement in the history of ADNOC Onshore. The second project I would like to talk about is the coke boiler replacement for Suncor (TSX:SU). On October 15, Técnicas Reunidas successfully completed the first fire of the first gas turbine and now our team is actively engaged in the hot commissioning and start-up activities. This project refers to an 800 megawatts cogeneration plant in Canada, using Mitsubishi technology. This project aimed to replace an outdated coke boiler by two highly efficient natural gas cogeneration units. The project will allow our clients not only to enhance steam efficiency, but also to strengthen its power export capacity to the Alberta Grid. In fact, we are pleased to announce now that, yesterday, it was the first day the steam produced by the unit was sent to other Suncor facilities. We believe this milestone underscores not only our technical construction and commissioning capabilities, but also our dedication to providing sustainable and high-quality energy solutions to our clients. Now let me move to a different topic, which is extremely relevant, if we want to secure the immediate growth and the improvement of profitability, the human resources. As outlined in our SALTA strategy explained in the Capital Markets Day, given the growing demand of services only contracts, TR has to increase its engineering resources. Although it is a quite hard challenge due to the scarcity of professionals in the energy sector today, I believe, we believe, we are being successful. A few examples. In Spain, we have increased our workforce by 20% in less than two years. In India, we have almost tripled the staff, which actually has over 1500 skilled professionals. Furthermore, in the Middle East, particularly in Saudi Arabia and the Emirates, we currently employ close to 500 engineers, positioning us strategically within this bitter region. We are also very proud of being honored last October with the award of the Top Employer 2024 certification, a recognition that contributes to attract top tier talent. Another fact that contributes to a better management of our human resources has been to integrate the digitalization in many of our processes. By adopting advanced digital solutions, we have not only optimized our resource allocation, but also achieved substantial cost savings. I wish also to emphasize once again that digitalization is a differentiating factor that contributes clients wanting to partner with us. And now let's go through the financial figures. In terms of sales, TR has once again exceeded the threshold of €1 billion on a quarterly basis, achieving €1.1 billion in revenue for the third quarter of 2024. Our EBIT for the quarter reached €47 million resulting in a margin of 4.2% over sales. The overall margin over sales in the year stood slightly above 4%, which is fully aligned with our guidance for 2024. Today, I also would like to emphasize how our 2024 nine months figures compare to those we had one year ago. When we talk about EBIT, it has grown around 10% due to a very solid performance. Similarly, at the bottom line, our net profit reflected a substantial increase of 58% compared to the same period of last year. All those figures highlight 2024 has been a year of growth both in sales and margins, and we have no doubt this trend will consolidate in the forthcoming years. And turning to the balance sheet figures, we can see again all figures have significantly improved during the last 12 months. Net cash figure has grown 23%. The equity has grown 19% and the gross debt has increased 15%. The evolution of all those figures proves the good performance of all our operations, and we expect they will go improving in the future years, especially regarding the net cash. You have to bear in mind that's important that the €298 million as of September we have in cash does not still include any down payment from the awards obtained during the second half of the year. But saying so, I would like to insist on the fact that under the actual market scenario where clients demand us to accelerate the projects, the wise way to use the cash is not to accumulate it in our balance sheet but to pass it to our suppliers and allow them to execute their works smoothly. I think it's also important to remark that Tecnicas Reunidas equity position has comfortably surpassed the €500 million figure. And now I leave the floor back to Juan for the conclusion of today's presentation.
Juan Lladó: Well, with this review, let me conclude the results of the presentation with my view, my conclusions and the guidance for the year. At this time, this quarter, I'd like to send a message of optimism. In the message of optimism, I'd like to with this message, I'd like to paraphrase and repeat the message that I wrote in the results release note. You have seen in the highlights that we show into the market quarter after quarter positive trends. Those positive trends, I'm confident and optimistic that will persist. And they will persist very important because of the market, because of the market dynamic. The market is demanding our service. It will persist the positive trends, because quarter-after-quarter, we're gaining more and more trust with our customers. I can assure you that we will continue improving. We're very well positioned with our customers and we grow alongside with them and will persist because our strategy, more dynamic and customer trust has translated into extremely high-quality and record backlog. And I'm optimistic because I'm absolutely convinced that our strategy, what we call SALTA it's really proven to be the right strategy. In respect with the guidance, let me reiterate our commitment of finishing this year with sales in the range of €4.5 billion alongside the focus on achieving a solid EBIT margin of 4%. And now, we will be glad here to answer any questions or points of discussion that you may have. Thank you very much.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Kevin Roger with Kepler Chevreux. Your line is now open.
Kevin Roger: Yes. I would have three questions, if I may. The first one is on the working capital. Working capital has deteriorated this quarter. So, can you give us a bit of color on the working cap and how you do see the evolution of the working cap over the next 12 months? Please, that would be the first one. The second one, you mentioned in the remarks that you were expecting -- that you are expecting a gradual improvement quarter after quarter and we have seen this quarter the EBIT margin increasing slightly. Does it mean that Q4 this year, Q1 next year, you expect this slight improvement in the EBIT margin to continue quarter after quarter, just to be sure we will understand that? And lastly, a few words on your remarks around the commercial pipeline, the expected commercial dynamics? So, any color here would be helpful also, please.
Operator: Sorry for the interruption, this is the operator. We are not able to hear you.
Eduardo San Miguel: Yes. We are here. Okay. Regarding the working capital, when I have a look to my balance sheet, what I see is the result of a mix of EPCs that are currently being launched, EPCs that are about to finish and a modest -- still a modest volume of services. Projects that are in the very early stages. If you don't get a down payment, it used to be neutral. Projects that are in the last stages and you are in the last moments of the construction, they tend to consume cash until you receive the final retention from the client, and the services is not the are not relevant in terms of size that the proposal cash. So, the point is I am still not happy with the picture I have in front of me, but I'm pretty sure that once the existing projects that are in the phase will start entering into the procurement phase, we will probably see a significant improvement in the cash situation. Obviously, we have our predictions and we are not going to -- I want today to share with all of you which are our forecast for the next year. But what is very clear is that little by little, you will see a true improvement of the cash and the working capital throughout 2025. As I said before, we still are waiting for the down payment on the three last projects you have in the list that Juan has provided today as new awards. So, they should have an impact or in the last quarter of this year or in the first quarter of 2025. And regarding the working capital. Regarding the margins, yes, you have realized that a little by little, our margins are improving quarter after quarter. I do believe that quarter is not the best way to understand how the priority is evolving, okay? What we told in the Capital Markets Day in Abu Dhabi was, by the end of 2025, you will see us solidly installed in the 5% margin. That's what we expect for that year. So, the consequence is that next year, we will see again how, again, a little by little, you will see quarter after quarter how the margins will go on improving. That's what I expect from the next year. And regarding the commercial pipeline, I will let Juan to answer you.
Juan Lladó: Hi, Kevin. I could agree more with Eduardo that we have to report quarters because we have to report quarters. And you have to talk on us in quarters because we have to make talk on our own quarters. This is not a quarterly business. This is a yearly business and this is the presentation that we made in Abu Dhabi. But nevertheless, we'll continue presenting on a quarterly basis. But if you want some color, I can give you a color of optimism. We have not presented this time and so the size of the pipeline, that is strong. We have not decreased because of the awards. This is big or even bigger than the pipeline that we had the previous quarters. Very strong, and very strong, when I said worldwide. I mean very strong in Europe and truly strong in the Middle East on the petrochemical sector and very strong in the U.S. We already have the footprint. This is petrochemical. So, you will see that we have some success stories in petrochemical. It's truly strong in gas. Obviously, it is strong in petrochemicals. It has to be if you start this gas, it has to be very strong in gas. But not only gas for petrochemicals or gas for consumption, but also gas for power, which down the stream will be well-positioned. Very often, we have said and I guess we are the only engineering company that works nicely and I enter that extremely nicely with all the power plants or power generator or technology suppliers, GE, Siemens (ETR:SIEGn), Mitsubishi, and Ansaldo. And we have signed contracts with all of them. And you will see conversions into lump sums with carry-outs, lump sums without all four suppliers, technology suppliers, and optimism and with a growing and a stronger quarter-after-quarter pipeline on low carbon technologies. Some of them, hopefully, you will see conversions from our front-end design, which are competitive front-end design or open loop front end design, and you will see more and more front-end, just pure service contract on lower power transition. I mean transition is a great opportunity for TR and for competitors as well. But I think that is good products is very important. Our customers are very much focused in the low carbon transition with our traditional customers as well as the new ones. So, pipeline is strong and together with our delivery capacity, we're gaining more and more credibility with our customers. We have delivered, and we're delivering very large projects and that type translates into a stronger automatically into not stronger pipeline. Thank you very much, Kevin.
Operator: Your next question comes from Mick Pickup with Barclays (LON:BARC). Your line is now open.
Mick Pickup: Good. Just a follow-up on what Kevin was asking there about your margin improvements. I listened correctly, I'm sorry, I couldn't find your presentation. You're doing €170 million of services this year, given the much better margin in that, I would have expected it to be just dropping through a bit quicker on to your group's margin. So, are there some costs associated with building that services line, which you're holding that margin dropping through to the group level? And secondly, in your text, you mentioned the Algeria project. Could you just give us some color on where you are on that. It's nice to see you mention it as moving forward.
Eduardo San Miguel: Yes. Regarding the first question, €172 million have been awarded within the year. But the delivery of those services is not in the year within a year, it takes at least a couple of years. So, the impact of the services in the revenue line is not that big. It's not that big. And if you are wondering what happens with the margin that comes from this and if it should be improving the overall margin of the Company, again, I go back to my first answer to the cash. It's -- today, we are in a mix of projects finishing -- so it's been launched services but not significant volume of services. The overall picture sells that clearly now and, in the future, you will see little by little the impact of those services. Don't ask me today to show you extra €15 million because I have a bigger share of activity devoted to services. But finally, you will see the results of the services line. In 2026, that was my message for you, give me at least one year because I need to construct this service division and until then, I do believe you will not see material impacts. That's my answer.
Juan Lladó: Let me answer you about Algeria because by traditional we stock in Algeria, if I had to say anything, or relationship with Sonatrach is better. I'm not going to say, month-after-month day after day. So, we are very close with them, and I'm very optimistic on this project.
Operator: Your next question comes from Robert Jackson with Banco Santander (BME:SAN). Your line is now open.
Robert Jackson: I've got a few questions, and I think one by one. So, first of all, the first question is related to your no carbon technology, the sales activity, which has increased from levels of €25 million in nine months last year to close to €94 million this year. Could we have some sort of breakdown of these sales? That would be my first question.
Eduardo San Miguel: Robert, I'm not going to provide you now a breakdown of the sales, but I think it makes sense to analyze this issue in detail in our year-end results, okay? Because I think it works to devote a few minutes to talk about how do we split the total sales between the different activities. But something you have to bear in mind, there is one EPC at least inside those figures. So, it's not only services there. Last year, you can revisit all the announcement we made last year and there is one EPC inside those €90 million. So, it's not purely services. But I understand the point I think it makes sense to analyze in detail what we have done in the services, but the idea is to do it by the year-end. And Antonio is offering you want to talk with him, please. He can give you some color.
Robert Jackson: Yes, the reason why last as a significant jump versus last year, but I understand as you move from wait until the end of the year. And my second question is related to -- regarding the decarbonization of industry and potential projects. We are especially related to the steel sector. We're hearing a possible slowdown in investment provisions in this sector? And is this something that Tecnicas is also dealing with or seeing from your side in this sector?
Eduardo San Miguel: Robert, [indiscernible], a good friend of yours is going to give you an answer.
Unidentified Company Representative: Robert, well, yes, you know that we have always considered that there was an excess of high in the news about the path of the reason of this decarbonization and -- but what we are seeing here is that our clients, the good clients are still committed to the ideal organization efforts, okay? So that's our first message that we want to deliver. It is true that some of the strategies they are redefining them, okay? We are seeing clients in the steel sector that are moving from hydrogen to carbon capture, okay? But what they need also is to see how the whole value chain is built, okay? So, this is something that we are seeing in the market. A part of that, what we are seeing also is that we are -- we have in the pipeline -- and we are already delivering services for ports that have pretty good fundamentals, okay? We are currently working in proposals and entering services that amount more than million tons just for the cement sector, for gain a figure, okay, for gain a fiber. So, the market is there. I think that the hype has disappeared. We have this good cream of rates with good fundamentals, and that's within what we are working on.
Robert Jackson: And I think I've got another question for you, [indiscernible]. So, considering the U.S. markets and the development of the renewable projects, for example, in the carbon capture and hydrogen. Do you see any risks that with the opportunities from the infrastructure funds who may be looking to finance new projects and thus may be more independent of the possible risk from the new administration? And also, some of the U.S. oil majors, they're also looking to invest in the renewables. And I think there's ExxonMobil (NYSE:XOM) looking at one of the largest hydrogen plants in the world. Can you give us your thoughts on these developments?
Unidentified Company Representative: Thank you. Robert, I have just landed this morning from the U.S. This week, I have been there and we have had several conversations with expert in regulatory affairs, okay? So, the message that we get from them is that we think, and we want to be very cautious, but we think that the Trump administration could even be better for investment in low-carbon technologies than the previous one. And I mean by that is that some of the regulatory requirements are going to be relaxed. I'm talking about, for example, additionality or incrementality in the hydrogen business. And on top of that, you have to consider that the red states are very fond of hydrogen, the green and the blue okay? The brew is with natural gas. We've got carbon capture. So, we see that there's going to be -- and it could be an increase of speed, okay, in these markets. And one thing also that is very important is that it seems that with this new administration, the permitting process to be more -- could be faster, okay?
Operator: Your next question is from Filipe Leite with CaixaBank. Your line is now open.
Filipe Leite: I have just one additional question. When do you expect a final resolution regarding the open litigation with the [indiscernible] KPP in Finland? Because in your annual accounts, is mentioning at the final decision is expected to be in 2024. And I'm wondering if this is still the case, should we expect something until year-end? Thank you.
Eduardo San Miguel: Filipe, I have to be very sorry. With some of those litigations we can be optimistic, but I don't think it's correct or sensible to talk about litigations in public. So, I cannot do any further analysis on that.
Operator: [Operator Instructions] Your next question comes from Alvaro Lenze with Elanda. Your line is now open.
Alvaro Lenze: Just I wanted to come back to working capital. Do you still have some €150 million of net working capital financing given the new model in which you will pass through the prepayments? And I assume that you will be moving towards a more working capital neutral scenario in the future, right? So, if that is the case, what I would expect. I would expect that financing to come down, maybe eventually turn to zero. But I would have expected that, which is the trend that you seem to be having, but I would have expected that to come from a reduction in the balances of accounts receivable and accounts payable. And what we are seeing year-to-date and quarter-on-quarter is that the reason why this financing has been reduced is because your accounts receivable is increasing, not because you are paying suppliers, which is what I would expect with the fact that you are in the latest stages of some projects on your ending deliveries and you are still paying the suppliers, and you still have some retained accounts, but I would not expect the accounts receivable to continue to increase. So, could you explain us the moving parts within the working capital, how should we expect them to evolve?
Eduardo San Miguel: Thank you, Alvaro. It's a good question. We have been analyzing in two previous questions, this issue. But I think I can elaborate a bit more, yes. It is -- again, let me allow me not to compare quarter versus quarter. If you analyze year versus year. And you make your numbers, you see that the -- both the account receivables and the accounts payable are very similar, as you said, but there is a difference. The activity of the Company has grown around 15%. So, if the volume is the same, but activity has grown percentage-wise, both the account receivables and the accounts payable are smaller. So, we are already showing the market through the balance sheet that the profit and the cash is improving and converting into a better balance sheet figure. So, that's first. Regarding the other question which is are you going to move to a need of zero financing facilities? The answer is it would take a time would happen, but it's not realistic to expect that because of two reasons. The first one has to do with a message I have given you hundreds of times. I want to pay as quick as I can to my suppliers. And if I need to get some finance from someone to accelerate those payments, I will be doing it. That's first because it's good for the project. And the second reason has to do with how we work. We try to keep separate all the different employees in our backlog. We don't like to mix. If we can avoid it, we about it. And from time to time, a project demands that the [indiscernible], and we don't want to move money from one project to another between other reasons because we are in a JV, and we are a partner. So, clients, our partners should not finance our deficit in other projects. So, it's very difficult for me to do a kind of huge cash flow with the whole company with every project, it can happen. So, I will always have some finance facilities available in my balance sheet. And I think I have answered your two questions.
Operator: There are no further questions at this time. I will now turn the call over to management for closing remarks.
Juan Lladó: Well, thank you, all of you. Thank you, all of you for staying this date. Thank you, Kevin, Mick, Robert, Alvaro now to leave all of you for bringing good questions to this late evening, almost evening Friday session, and we'll be talking to you again I guess, will be at the end of February with the end of the year and audited numbers. Thank you very much again. See you soon.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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