Port of Tauranga Limited (POT.NZ) Earnings Call Transcript

Good afternoon, everyone, and a very, very warm welcome to today's annual meeting of the Port of Tauranga Limited. For those of you that don't know me, my name is Julia Hoare, and I'm really privileged to chair your company. Mercury Bay Park have some housekeeping notes, and they'd like me to pass those on to you. So for emergency evacuation in the unlikely event of an emergency, the fire alarm will sound throughout this theater. So please make your wait the nearest exit and move toward the emergency assembly points located in the car parks. Please remain outside until you instructed that it is safe to return. Today's meeting is being webcast live for those unable to attend in person. Part of our commitment to shareholders is making our meetings as accessible as possible regardless of your location. Therefore, we're pleased to welcome those of you who are participating online through our virtual platform, provided by our share registry MUFG Pension Market Services Limited. And we hope that by holding a hybrid meeting will give greater support for your participation and engagement amongst actually all of our shareholders. So welcome to all of you, whether you're here in the room or online with us today. As you'll appreciate, this is a formal meeting and there are certain formalities that we will need to work through. So please bear with me. The company's secretary has confirmed to me that the notice of meeting was sent to shareholders and other persons entitled to receive it on the 28th of September. As a quorum is present, I have the pleasure in formally declaring the meeting open. Present today are our auditors, Matt Machuca and Glenn Keaney of KPMG down here in the front; our lawyers Ken Hawks of Holland Beckett; our share registry managers, MUFG, Pension & Market Services; and that's Brendan Loader and his team. And in keeping with best practice, we will be conducting a poll at the end as each resolution -- at the end of all of the resolutions of the Notice of Meeting. And for those of you that are here with us in Tauranga today, you'll be able to cast your vote by filling in the form you brought with you or received at the registration desk on your way in and the form will be collected from you at the end of the formal part of today's meeting. And for those of you that are participating online through the online virtual website, you'll be able to ask questions and vote once you have validated your registration. And to vote, you'll need to click the get voting card within the online meeting platform, and you'll be asked to enter your shareholder or proxy number to validate. And then please mark your voting card the way you wish to vote for. It's for, against or abstain on the voting card. Once you've made your selection, please click the submit vote button on the bottom of the card to module boat. So please also refer to the meeting -- virtual meeting online guide and portal if you've got any specific help. There's also a help line, which has been specified for your assistance. Now those of you that are in the room, there's going to be an opportunity after the meeting concludes to please join us for refreshments, and be able to have a chat with any of my fellow directors and myself and also our management team that are here today. And in addition, we're still delighted to be able to continue with our port to us for shareholders, and I'll discuss the logistics of those at the conclusion of today's meeting. So I'd now like to take this opportunity to introduce your directors to you. And I'll ask them to raise their hands so you know who is who. Firstly, Ken Shirley, Fraser Whineray, Alison Andrew, Dean Bracewell and Robert McLeod. Unfortunately, Brodie Stevens, he is online, but he's not going to be attending here in person today. He had quite a bad flu virus, and we decided we didn't want to infect all of you in the room. So we asked Brodie to please stay away. I'd also like to introduce our management team. I've got here on the podium, Leonard Sampson, our Chief Executive; and Simon Kebbell, our Chief Financial Officer -- so Leonard Sampson, our Chief Executive; and Simon Kebbell, our Chief Financial Officer and Company Secretary. And we've also got other members of the leadership team in the audience today, and I'd ask each of them to stand up as I call their name again so that you can identify them if you want to ask any questions when you get a chance later. So Blair Hamill is our GM Commercial; Pat Kirk is our GM Health and Safety; Rochelle Lockley is our GM Communications and she's down the back. And we also have here with us today Kura [indiscernible] Kura is going to be our GM of Corporate Services, and she's starting with us in November. So we're delighted to have you joining the Tauranga. Unfortunately, Dan Nebo, our GM Property and Infrastructure is unable to attend today, and he sends you his apologies. And I really would like to thank all of you, our shareholders, for your level of participation in today's meeting. And my fellow directors and I do intend to vote all of the discretionary proxies that we have received in favor of the resolutions as set out in the notice of meeting, unless we're specifically disqualified from that resolution. So I'd now like to present the Chair's address, which will be followed by the Chief Executive's address and then the formal part of the day. Look, I'm very pleased to be reporting on a record underlying profit for the 2026 financial year driven by successful yield, cost and productivity initiatives. Despite lower cargo volumes, underlying group net profit after tax increased 23% to $155.3 million. Revenue increased 4.7% to $486.5 million, while other operating costs decreased 6.2% to $221.7 million. Our subsidiary, the joint venture company has also performed really well and their contribution was increasing by 42.1% to $15.5 million. So these are really outstanding results, particularly given the challenging economic conditions and the ongoing capacity constraints that we've faced. Total trade volumes decreased 3% to 24.6 million tonnes, and this was mainly due to the reduced log and coal volumes, while container volumes remained resilient at just over 1.2 million TEUs. Leonard will go into more detail on the cargo category shortly. The strength of the business enabled the Board to declare a final dividend of $0.125 per share, bringing the total ordinary dividends for the year to $0.205 per share. That was a 22.8% increase on the previous year and approximately $139 million in dividends to shareholders in the 2026 financial year. This represented a payout of 90% of our underlying earnings. And we're really pleased to deliver this increased return to shareholders while we continue to invest in the long-term capacity and resilience of the business. One of the most important developments of the year was the significant progress we've made in securing resource consents with the Stella Passage development. This project involves extending the sulfur point container berth by 385 meters and the Mount Maunganui wharves by 315 meters. It will be achieved by converting existing cargo storage land within our current footprint. As you've heard from us for several years now, this development is urgently needed. Our container terminal is essentially at capacity. And we have a queue of shipping lines want to increase their business or introduce new services through Tauranga. To recap our journey so far, very briefly, we started our formal consultation back in 2019. And in December 2024, we secured environment court approval for the first stage of the development. The decision was immediately appealed and so we opted into the fast track process. Unfortunately, due to an error in the legislation, which was not of our making, our first attempt under the Fast Track Approvals Act was successfully challenged in the high court. After the legislation was fixed, we made a fresh application in January this year, and a 3-day cultural fix hearing was held on the [indiscernible] in July. On the 7th of September, the Fast Track expert panel issued a decision approving the development subject to a number of conditions. After such a long process, this has been a really significant milestone. The decision, unfortunately, is now subject to 3 appeals by [indiscernible] and 2 judicial review applications by ARPU. We expect these to be heard in a single hearing, and we hope to confirm an urgent hearing date any day now. The Stella passage, the development of it is absolutely vital for our customers, both the regional and also for both regional and national economies as well. Additional birth capacity will enable greater competition and better productivity, helping to reduce supply chain costs for New Zealand's importers, exporters and ultimately consumers. It will also unlock important decarbonization opportunities by allowing us to introduce electric automated stacking cranes at the terminal and by facilitating more visits from larger vessels, which are far more carbon efficient. The Environment Court and the fast track panel agreed that the developments impact on the environment according to Western science will be minor in the short term and negligible in the long term. We remain committed to working with EWA and ARPU regarding their cultural concerns around the development with ongoing consultation embedded into the resource consent. Importantly, however, we have not stood still while the Stella Passage consenting process has continued. The second stage of our capital dredging program is underway with completion due around mid-2027. We're also progressing preparations to introduce automated stacking cranes or ASCs, as we call them, into the container terminal alongside construction of the new berth. We've completed the emulation phase where processes are tested virtually, and we're now refining processes and system design, ensuring operational readiness and finalizing contracts with our preferred vendor. This first stage will involve 2 blocks of 9 electric ASCs, which will coincide with the completion of the new container birth. In August, we took delivery of another 6 hybrid straddle carriers as well as New Zealand's first fully electric strand carrier. We're also building New Zealand's first hybrid tugboat expected to be delivered in mid-2027 from Turkey. These investments will all improve efficiency while reducing greenhouse gas emissions. We firmly believe that growth, productivity and environmental performance can and mast progress together. Wearing my other hat as Chair of the Northport Group, we are very pleased with the granting of resource consent for its planned expansion, which includes nearly 12 hectares of reclamation, a 250-meter wharf extension and associated capital dredging. The expansion will give Northport and the Northland economy, the opportunity to play a much larger role in an increasingly integrated upper North Island supply chain. The timing of the development will depend on freight and demand and progress on the proposed rail link to Marsden Point. Turning now to governance. I'd like to thank my fellow directors for their diligence and commitment over the past year. During the year, we also be [indiscernible], and we have our sincere gratitude to him for his many years of service, and we're welcomed Ken Shirley as a keyside appointed Director. He stands for election today at our meeting. Our future Director, our first one that we'd ever had was Scott Campbell, and he concluded his appointment on the 31st of March, and we also thank him for his contribution. Fraser Whineray is also standing for reelection today, and you'll hear from both him and Ken when it comes to meeting resolutions. Before I hand over to Leonard, I'd also like to thank the senior management team, and all of our port people for their efforts over the past year, the improvements in productivity and customer service and the ongoing investment, and in capacity and progress in improving environmental outcomes gives us great confidence in Port of Tauranga's future. So now [indiscernible], and I'd now like to hand over to Leonard Sampson. Thank you.

Thank you, Julia and [indiscernible]. The 2026 financial year was indeed a very successful one for Port of Tauranga. I'd like to start with a particular highlight for us, which was the improving service delivery to our customers, which has been a major focus over the past year. Our average net crane rate increased 9.9% to 30.8 moves per hour along with our ship rate or also known as birth rate, increasing 13% to 76.4 moves per hour, up from the previous 67.2% in the year prior. This was helped by an improvement in schedule reliability with the proportion of container ships arriving on time, increasing to 71%, up from 62% in the previous year. As mentioned before, our team also introduced new technology in terms of emulation, which has helped us to better improve planning and straddle efficiency to reduce unnecessary container rehandling. We will continue to focus on service delivery and productivity, particularly as our birth capacity makes it challenging to recover from supply chain shocks and disruptions. The Port of Tauranga's Stella Passage development remains critical to providing the resilience of the New Zealand supply chain so desperately needs. Improving productivity, however, will never be at the expense of safety. We encourage honest and full reporting of all incidents and concerns supported by regular inspections, audits, observations and verifications. Our total recordable injury frequency rate for the combined Port of Tauranga's staff and contractors, increased from 16 to 19.5 per million hours worked. Whilst we are not satisfied with that increase, it's important to note that over 98% of these relate to soft tissue sprain and strain type injuries and there are some encouraging underlying indicators in the data. Our lost time per injury in decreased 55% along with the injury severity rate also decreasing 49%. Our focus remains on continuous improvement, learning from all of our incidents and strengthening our critical controls. I will now take a closer look at some of the cargo trends over the past year. As mentioned, total trade volumes for the year were down 3% to 24.6 million tonnes. The biggest impact, as mentioned previously, was from lower log and coal volumes, resulting in total export tonnage decreasing 3.3% to 15.9 million tonnes, and imports decreasing 2.3% to 8.7 million tonnes. Logs were impacted by higher fuel costs decreasing 8.1% to 5.8 million tonnes, and that has prompted some exporters to reduce harvesting particularly in the second half of the financial year. Coal imports decreased 64% in the year as stockpiles at the Huntly Power Station stabilized and South Island hydro electric generation was sufficient to avoid coal-fired generation over the winter period. Cargo volumes for [indiscernible] increased 3.9%, with Kiwi growing 8.5% to a record volume of 754,000 tonnes, with further growth continue -- expected to continue. Together, the strong [indiscernible] volumes contributed to another record year for refrigerated containers. Container volumes overall remained resilient, increasing just under 0.5% to 1.21 million TEU. We had 79 cruise ships visit for the year, and we're expecting about the same number this coming season, the first of which arrived on the 13th of October. Air and storm water quality remain a focus for us. And whilst we continue to meet all of the consent conditions in our store motor resource consents, we take on a continuous improvement approach to our performance. To that end, we opened a new store water treatment facility at our Mt Maunganui wharves. The new system captures the first flush of a heavy rain event and can hold up to 1 million liters of treatment before it is released. As Julia mentioned, we're also excited to be in a position of New Zealand's first fully electric straddle carrier, which we'll be trialing over the next year. That will give us the opportunity to test the performance and charging infrastructure within our unique operating environment. The $3.5 million trial is being supported by the Energy Efficiency Conservation Authority, and if successful, we will be able to introduce further additional electric straddles into our fleet. In the meantime, the 6 new hybrid straddles will bring our total hybrid fleet to 13, representing 1/4 of our total straddle number. And another New Zealand first, our new hybrid tug, which is under construction in Turkey, -- and is due for delivery in mid-2027, will provide greater capacity at 80 tonnes of bollard pull compared to the 50-tonne bollard-pull tug it is replacing. This will give us the ability to handle larger vessels we expect to see in the future. Also, the capital dredging will provide us the ability to cater for these larger vessels and some of the vessels that already call at the moment, having the ability to transit at both low and high tide. This will give us greater flexibility, particularly as we wait for the much-needed capacity improvements provided by the Stella Passage expansion. We are deepening the channel to allow for vessels of up to 15.5 meters in draft and our investments and bigger ships are important for New Zealand's decarbonization efforts. Larger ships are more fuel efficient and produce fewer greenhouse gas emissions per container. We are making good progress in reducing our emissions. And over the past year, overall Scope 1 and 2 emissions decreased by 12%, with emissions intensity per tonne of cargo reducing 9%. Before I finish, I will give you a quick update on the trade in the first quarter of this 2027 financial year. Total trade volumes for the 3 months ended 30 September was 6.25 million tonnes, down 4.8% on the previous year, and reflecting the continued impact of elevated fuel costs, particularly on export logs. Our container volumes for the first quarter were 311,000 TEUs, down 2.6% of the previous year and reflecting a slower start to the export season. Based on the first quarter's cargo volumes and notwithstanding any significant changes to trading conditions or events beyond our control, we expect full year underlying group net profit after tax to be in the range of $160 million to $175 million. There are a number of uncertainties, including the ongoing conflict in the Middle East, the impact of high fuel prices, particularly on log exports as well as broader trade policy settings. Frustratingly, we also remain capacity constrained at the container terminal until the Stella Passage development can be completed. That being said, we do, however, remain confident in our future, thanks to our operational strength, quality infrastructure, diversity of cargo and revenue streams as well as strong customer relationships and a very clear strategy for growth. None of our achievements over the past year would be possible without the dedication and effort of our people. I would like to thank the team for their hard work and commitment throughout the year. Also, thank you to our customers, business partners and service providers for your continued support as well as the communities we serve both here in the Bay of Plenty and beyond. Finally, I would like to acknowledge you and our shareholders for your continued trust and support in our business. Thank you for joining us today in person and for those of you online, together, we continue to connect New Zealand in the world. Thank you.

I have a newfound appreciation people like yourself, actually, when you suddenly have to get on to [indiscernible] for those of you who have to use anything from a mobility perspective, look, it can be hard work. So a real appreciation. Look, thank you very much, Leonard. I'd like to go to the more formal part of the meeting, and I'd first like to start with our integrated report. The 2026 integrated annual report containing the financial statements and the auditor's report for the year ended 30 June 2026 has been sent to those requesting it and is available to view also on our website. And I'm happy to take any comments or questions that you may have on this in our general discussion later after the rest of the formal business has been dealt with. But I now propose that we received the integrated annual report for the company for the year ended 30 June 2026, including the audit report and financial statements. So ladies and gentlemen, we now come to the formal part of the business, matters requiring resolution, which are outlined in our Notice of Meeting. Moving to the resolutions. As I mentioned earlier, I propose to call a poll on each of these resolutions. Many shareholders have already voted by proxy, and the results of the polls will be announced by the stock exchange after today's meeting. Resolutions 1 and 2 on the agenda relate to the election and reelection of directors. Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without election beyond the next annual meeting following that director's appointment. Director, Ken Shirley was appointed to the Board as a Keysight Holdings Limited nominated Director with effect from the first of April 2026 and has been a Bay of Plenty Regional Counsel since his election in 2022. Pursuant to Clause 26 of the Constitution, he now offers himself for election with unanimous support of the Board. Under the NZX Listing Rule 2.7.1, a director must not hold office past the later of 3 years and the third annual meeting after their appointment, without being reelected by shareholders. No directors are required to retire from office at the Annual Meeting under NZX Listing Rule 2.7.1. Fraser Whineray was due to retire by rotation at the 2027 Annual Meeting, alongside myself, Alison Andrew and to Robert MacLeod. The Board is conscious of the need to balance the benefits of continuity and experience with the need for orderly succession over time. Mr. Whineray is standing for reelection early to support an orderly pattern of director rotation. Mr. Whineray offers himself for reelection at the annual meeting with the unanimous support of the Board. If reelected, Mr. Whineray will continue as a director on the basis of the Keyside Holdings Limited's nomination. Both directors are nonindependent due to their relationships with Keysight Holdings. Biographical details for both directors are contained on Page 79 of the 2026 integrated annual report, and they're also on our website. So we'll deal with the election and reelection of the 2 directors separately. But just a reminder to those of you that are in the room, your votes on all of the resolutions will be collected at the end of the meeting. So firstly, we're going to deal with the election of Ken Shirley. The Board recommends Ken Shirley to you as a Port of Tauranga Director and unanimously supports his election. So I invite Ken to come up to the podium and address the meeting on his proposed appointment.

Thank you, Julia. As indicated, I am 1 of the 2 non-independent directors nominated -- to be elected by the shareholders to serve the Port of Tauranga. I'm very honored to be in that position, succeeding Doug Leader, the former Chairman of the Bay of Plenty Regional Counsel. I currently serve as a regional counselor, have done since 2022, representing the Western Bay of Plenty constituency. I chair the Regional Transport Committee, which covers all aspects of transport, roading and the various other modes and also the public transport component. Just briefly some of my background. I'm a science graduate many years ago. I've served on 4 National Industry Associations, perhaps the 2 most relevant to the ports businesses. I was an inaugural CEO of the New Zealand Forest Owners Association and served in that role for 6 years, worked closely with the ports around the country, as you'd expect, with the forest industry. More recently, through to 2019, I'd serve for 10 years as the CEO of the Road Transport Forum, which is the association principally representing the freight and logistics industry and again, work closely with many aspects of the various port companies around the country. So I have a long-standing interest and are delighted to be having the honor of serving as a director for your company. And I'd have to say, since joining in April, I've been hugely impressed with the culture. And to me, culture is everything. As Peter Drucker said, culture eat strategy for breakfast. And the culture of the Port of Tauranga is impressive. The Board, the executive staff, and just the talent around the Board table, I'm an awe of the skills and experience of my fellow directors and also of the executive staff. So I see it as a great privilege. And -- but my prime responsibility is, of course, to serve the interest of the company and above all your interest, the shareholder. Thank you.

Look, thanks very much, Ken. I now propose that Mr. Ken Shirley be elected as a Director of Port of Tauranga Limited. But before I ask you to do your vote, are there any matters for discussion or any questions from shareholders relating to Mr. Shirley's election. So I'll start with the floor and then I'll see if there's any online. Does anyone in the room have any questions for Ken? I can't see any. Are there any questions online? No. Thank you. So there are no questions from shareholders. So thank you, Ken. Thank you, everybody. Please can you submit your vote by marking for, against or abstain in the appropriate place on your online voting card, those of you that are online. And those -- when you're participating through that virtual meeting website, you should submit your votes now. Thank you. I'll give you a minute to do that. [Voting]

Thank you. Secondly, we're going to deal with the reelection of Mr. Fraser Whineray. As I mentioned before, the Board recommends Fraser Whineray to you as a Director of Port of Tauranga and unanimously supports his reelection. So I'm going to now invite Fraser to address the meeting on his proposed reappointment.

Thanks, Julia. I certainly want to acknowledge you as our shareholders, both here and online. I want to acknowledge the team from Keysight here, which owns 54% of the Port. So a very significant shareholder in Kaitiaki of huge asset on behalf of Bay of Plenty households, which makes every Bay of Plenty household also a shareholder in the port, albeit not directly. And they've had a record result this year, half probably due to the port and half due to their own stewards, so congratulations Keyside for being Kaitiaki of that fund. Also not here directly millions of KiwiSaver accounts in New Zealand, which will probably have exposure to the port and are interested as shareholders and directly in the success. Certainly acknowledge customers, our shipping lines, logistics providers like KiwiRail, [indiscernible] partners like [indiscernible] Group Holdings, Timaru District Council, Northland Regional Council suppliers and the dedicated employees led by Leonard and the committed Board led by Julia is certainly a privilege to be a part of this business. I certainly care a lot about the criticality of this port and its associated infrastructure throughout New Zealand to both New Zealand and New Zealanders. We must continue to provide resilient direct and efficient export to markets for all of our exporters. We like to buy a lot of things that are imported and you need exports going the other way to pay for that. I think the environmental stewardship is going very well. Leonard touched on the storm water improvements, which weren't just an improvement for the port, it was also an improvement for the residents of Mount Maunganui, some of whom still water comes underneath the Portland. And I'll be showing my commitment to the water quality by swimming in a triathlon in January next year in Pilot Bay, all things going to plan. Also, the community import has been substantial, and I enjoy seeing this and seeing how effective with Surf Life Saving Coast Guard and many more groups which are outlined in that integrated report that the Chair referred to earlier. Now it really is critical that the port has the capacity to provide services to exporters and importers. And right now, it's tapped out. And the cost of that, 1 example of it, which has been reported publicly by Leonard earlier this year is probably close to $2 million a week to New Zealand. And that concerns me. It should concern a lot of dairy farmers. It should concern a lot of kiwifruit growers. And it concerns many people that we touched on earlier that rely on the port. So it really is critical that we expand. My experience was outlined in the notice of meeting, being executive and now Non-Executive Director of various companies that are focused on long-term infrastructure that's good for New Zealand. I'm grateful for your support. There's certainly a lot to get on with, and it's my privilege if reelected to be a part of that.

Look, thanks very much, Fraser. I now propose that Mr. Fraser Whineray be reelected as a Director of Port of Tauranga Limited. But before I pass it to the vote, are there any matters for discussion or questions regarding the resolution relating to Mr. Whineray's reelection. Again, we'll start with those of you in the room, and then I'll turn to those online. Are there any questions in the room? I can't see any. Are there any questions online? No? Thank you. Well, thank you, everyone. And for those of you online, please submit your vote for, against or abstain in the appropriate place on your online voting card. And for those of you participating through the virtual meeting website, you should submit your votes now, and I'll just pause for a minute to enable you to do that. [Voting]

Great. The Auditor-General as auditor of Port of Tauranga Limited, pursuant to Section 19 of the Port Companies Act, 1998 is automatically reappointed auditor for the year ending 30 June 2027. KPMG will undertake the audit on behalf of the Auditor-General. This resolution concerns the fixing of the auditor's remuneration and seeks shareholder approval that directors be authorized to fix the auditor's remuneration. Port of Tauranga's statutory audit fees for the financial year ended 30 June 2026 were $463,000, including disbursements. So I now propose that the directors are authorized to fix the remuneration of the auditor. So again, are there any matters for discussion or questions from shareholders present or online concerning this resolution. And I'll start with those of you in the room? Does anyone have any questions? No. And online? No. Thank you. So there are no questions from shareholders. So again, for those of you online, please, could you submit your vote for, against or abstain in the appropriate place on your own online voting card. And could you -- for those of you through the virtual meeting website, you need to submit that vote now. So again, I'll just pause for a minute to enable you to do that. [Voting]

Thank you. Well, our share register, MUFG Pension and Market Services are now going to move through the room to collect your voting cards. For those shareholders online, please, can you ensure you have actually submitted your vote. Voting is going to remain open until 5 minutes after the conclusion of this meeting, and the results will be announced to the NZX by the end of the day after the conclusion of the meeting and will also be on our website. So I'm now going to move on to general business. I'd now like to open up the meeting for general discussion, and this is actually the part of the meeting where you, as shareholders, have the opportunity to raise further questions. We've received no questions in advance. So what I'm going to do is start with taking questions from the floor. I'll also take questions from those of you online. If we receive multiple questions of a similar nature on the same topic from the online participants, we're going to aggregate those into a single question.

So I'll start. Are there any questions of a general nature that anyone would like to raise? And I will start with those of you in the room. There's a hand up over here. Could you please state your name before you ask your question.

I'm Chris Brown. My question would be, I love the initiative of the Future Directors program. And my question would be, are you hoping to or planning to continue that?

Absolutely, yes. We found that a particularly rewarding experience, have a completely different perspective around our table and a great perspective. And one of our key goals with the program as well is to really think about the future governance of entities in the Bay of Plenty and to make sure that we are training a really good pipeline of people that can be directors in the future here. So we're in the process at the moment of looking for our next future director. So they will be here definitely at our next annual meeting and that we hope to have them in place in the not-too-distant future. Thank you. Are there other questions from the floor? This one down here. Thank you.