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Edited Transcript of ENG.MC earnings conference call or presentation 27-Feb-19 8:00am GMT

Full Year 2018 Enagas SA Earnings Call

Madrid Mar 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Enagas SA earnings conference call or presentation Wednesday, February 27, 2019 at 8:00:00am GMT

TEXT version of Transcript


Corporate Participants


* Antonio Llarden Carratalá

Enagás, S.A. - Executive Chairman


Conference Call Participants


* Arthur Sitbon

Morgan Stanley, Research Division - Equity Analyst

* Harry Peter Wyburd

BofA Merrill Lynch, Research Division - VP and Junior Analyst

* Javier Fernandez Garrido

JP Morgan Chase & Co, Research Division - Head of Utilities and Senior Analyst

* Jorge Guimarães

Haitong Bank S.A., Research Division - Equity Research Analyst




Unidentified Company Representative, [1]


Hello, good morning, everyone. Welcome to this results presentation for Enagás corresponding to the year 2018.

The results have been published this morning before the opening bell and they are, as always, available on our website, www.enagas.es.

Antonio Llardén, Chairman of Enagás, will host the presentation.

We foresee a duration of around 40, 50 minutes and we will open Q&A session where we will try to give as detailed answers as possible.

So thank you all for listening, and I will now give the floor to Mr. Antonio Llardén.


Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [2]


Good morning, ladies and gentlemen, and thank you so much for attending. We are presenting to you today the results that Enagás obtained in 2018.

During our last conference call with analysts, we announced that during the first month of 2019, we would be presenting the update of our strategic vision for 2019-2023, which will be done during the next week before general shareholders meeting with a specific call to explain, in a detailed manner, our strategy for the coming years.

With regards to 2018's results and considering that you already have the whole presentation with all the information and the figures ever since this morning, I am going to be focusing on 5 topics that I believe to be more relevant.

The first one is the following figures. For 12 years in a row, we have been fulfilling the objectives we have set for ourself for the year. The net profit after taxes, as you can see, has come up to EUR 442.6 million. This represents an increase of 1% compared to last year without including the accounting effect derived from the revaluation of GNL Quintero, which took place in 2017. This increase is in line with the objective of annual accumulated average growth of 3%, which we set for the 2016 to 2018 period.

In these results, the contribution of our affiliates has been key, which already accounts for 20% of our net profit after taxes. So profit after taxes.

The year 2018 has also been characterized by a solid cash generation, which has allowed us to significantly reduce our leverage by over EUR 733 million. And as a consequence, this has allowed us to, once again, increase our dividend by 5% as we committed to do on a yearly basis until 2020.

The second point I wanted to highlight are our investments. We have had 2 relevant operations during 2018. The first one was our entry into Greece, as you already know, through a consortium with 2 other European TSOs called Snam and Fluxys. We have purchased 66% of DESFA, the operator for the Greek natural gas transport network. This acquisition implied an investment for Enagás of EUR 40.5 million.

The second operation was the sale, together with Fluxys, also our partner in this transaction, of our 50% stake in the Swedish operator, Swedegas. The sale had a profitability in terms of IRR after-tax exceeding 10% and a cash inflow for Enagás of EUR 100.5 million.

These 2 transactions fit in with the strategy we announced of contemplating the possible rotation of some assets outside of Spain in order to undertake potential new international investments in our core business in selected markets, markets that we have selected as priorities for strategies and strictly complying with the international investment criteria, which have been established by Enagás.

Additionally, this is an important fact as well. We have continued to invest in the Trans Adriatic Pipeline, TAP, a project which is a key infrastructure in Europe's energy development, especially Southern Europe, which has an advancement of 85.2 percentage -- progressed 85.2%.

In December, we successfully closed its financing by securing a EUR 3.96 billion project. This is the largest financing project agreed for a European project during 2018 and it highlights the confidence that financial institutions have in TAP, a pipeline which has been classified as a project of common interest by the European Union.

After the financial closing, TAP made a partial refund of the contributions that we had advanced -- that we, the partners, had advanced for the execution of the project. And this has meant in 2018, for Enagás, a cash inflow of EUR 415 million.

Until TAP is operational, Enagás will continue making contributions, EUR 62 million per year, till we reach a total investment of EUR 232 million, in line with the capital structure foreseen in the project.

Allow me to comment on the fact that when TAP is completed in 2020, at Enagás, we will have a total international asset base of around EUR 2 billion.

GSP, since we've always decided to do this during our results presentations, I will now tell you what is our involvement in the Gasoducto Sur Peruano. The ICSID admitted the initiation of the arbitration that we requested on July 2 and the times and procedures, which were established therein are unfolding as expected. As a matter of fact, we are currently in the designation phases. So we are choosing the arbitrators.

The Minister of Energy and Mines of Peru has recently announced that the new transportation system that will supply gas to the south of the country will be tendered in 2020 and they have indicated that it will foreseeably be done by maintaining the original layout of GSP since it is the most economical option. This shows that this project is key to the energy supply of Southern Peru. During the next meetings, we will continue informing about the development of this project.

And the third item that I wanted to highlight is the fact that our financial situation continues to be very solid with diversified sources for financing with a net cost of our stand-alone debt of 2.3% and with no significant debt maturities until 2022.

I have already said that in 2018, we have reduced our leverage. Allow me to drink a bit of water. Thank you. So this leverage reduction, coupled with the one that took place in 2017, has led us to close the year with a net stand-alone debt that is excluding GNL Quintero of EUR 3.63 billion compared to the EUR 5.089 billion, which we had at the end of 2016. So quite clearly, this has been possible thanks to the solid cash generation during that period.

In 2018, Standard & Poor's as well as Fitch both have restated their long-term ratings for Enagás at A-. We maintain, as a matter of fact, with these rating agencies a completely transparent relationship with permanent communication.

The fourth point of the 5 points that I wanted to tackle is the evolution of gas -- of natural gas demand. In 2018, it has remained stable compared to 2017. We must remember that it was especially positive year where we saw an increase of 9% in the demand. This evolution is explained by the positive performance of household commercial demand, which grew by 6%, and most specifically, of industrial demand, which increased by 4%. The positive performance of industrial demand is a good indicator of the progress of Spanish economy since the main natural gas consumers are the largest exporters of our country as well. 60% of all the gas used in Spain is for industry, a bit more than that perhaps where, today, natural gas is irreplaceable due to its calorific value as well as its competitiveness.

So far in 2019, as of today, the domestic demand for natural gas has evolved positively, growing by more than 6%.

And finally, the fifth point is a point in which I would like to underline that we maintain our commitment to sustainability, working very closely with the United Nations 2030 agenda and the sustainable development goals, or FAGs of this agency.

In 2018, we were acknowledged as leaders in our industry by the world benchmark, the Dow Jones Sustainability Index. We continue to promote diversity and gender equality. In 2018, we were the top Spanish company among the 200 leading companies in gender equality worldwide in the Equileap 2018 ranking.

Additionally, we have already begun 2019 with another recognition. We have been included in the Bloomberg Gender-Equality Index, GEI, which distinguishes the global companies worldwide that are most committed to transparency in gender information and the promotion of equality. In particular, Enagás has been given a score above the average of the utilities sector company and average out of the 230 companies included in the index.

To this end, this is another example, and as you have seen in our general meeting call, in our GSM call, which has been made public today in parallel with the results presentation, the proposal -- the board of directors of Enagás, following the proposal of the Appointments, Remunerations and Corporate Social Responsibility Committee has proposed the addition of a new independent director, Patricia Urbez, as Senior Director to be approved by the GSM. This would mean that, once approved by the general meeting, that we would increase the presence of women on our Board of Directors to 30%, complying then with the recommendation of the code of Good Governance 2020 issued by the CNMV.

Before reaching our conclusions and going into our dividend policy, I would like to take a minute to comment on an important event by the CNMV. This is a very important event from the regulatory point of view that took place in the third quarter. The Spanish government has transferred an important part of the regulation to the CNMC. I have attended a formal meeting as the Chairman of Enagás with the Chairman of the CNMC in which he confirmed that the committee has started works on the new scheme with the schedule of the matters to be dealt with.

In general terms, I can summarize that the schedule would be organized as follows: to begin, the CNMC will send the government -- or has already sent the government the general topics for its work to receive confirmation as to the fact that they are in line with the government's strategic priorities in energy matters. The committee will then prepare the proposal of the different methodologies that affects the energy sector. Thirdly, these proposals will be submitted in due time and form to public information giving companies and agents in the sector the opportunity to make contributions. The fourth and final, the final provisions will then be drafted.

Personally, I think that this new system will give us greater regulatory transparency and security in the medium term. And so far as the CNMC, as an independent body, is not subject to the contractual variations of a country's political agenda.

Finally, going now into the conclusions, I would like to underline 5 conclusions. We have ended a good year in 2018. All of our objectives have been met for the 12th consecutive year, and perhaps it's not even necessary to mention, but I'm going to reiterate that this has happened in the context of very turmoiled markets -- international markets. There has been a change in government in Spain. But in spite of all these factors, the company has managed to sail these waters quite comfortably.

Secondly, I will now say that our affiliates now have a vital role in the growth of the company as they provide 20% of our profit. Thirdly, we maintain, and we must underline, that we have a very solid financial profile and we have reduced our stand-alone debt by EUR 1.459 billion during 2017 and 2018.

Fourth, sustainability is a cornerstone, a strategic cornerstone, that conditions the present and future for us all. It is a strategic priority of Enagás as has been for many years. And for example, we have reduced our CO2 emissions by more than 30% during the 2016-2018 period compared to the previous measuring period, which was the 2013-2015 period.

Fifth and last, in the specific case of our objectives for this financial year 2019, I can say that they will be fully in line with what is already known by the market and we will detail them in our 2019-2020 strategic perspectives that we will be presenting in the coming weeks, possibly in the first or second week of March, right before the GSM.

Today, we've also made an effort so that our conference call wouldn't coincide with that of other companies in the sector. Actually, we were going to do it yesterday, but we realized that they have investors day for Iberdrola and Endesa was also presenting their results yesterday and we decided to do it today then. And we will try and do the same with the strategic presentation and the GSM even though sometimes it's very difficult to not overlap with other companies.

This 2019-2023 progress that we will break down in greater detail in a couple weeks or 3, well, this perspective is based on 4 strategic lines of action. The first is to promote our role as transmission system operators and technical manager of the gas system in Spain by maintaining maximum efficiency in the operation of gas infrastructures in our country, thus, guaranteeing security of supply and facilitating access to energy agents, promoting competitiveness as a key factor in addition.

The second building block is our commitment to ecological transition in which natural gas has a key and irreplaceable role to play in sectors such as the industry, also contributing to the use of LNG in heavy transport and light transport, too, even. And finally, also to the development of projects for energy efficiency and renewable gas such as biomethane and hydrogen.

The third building block will be to promote our core business in international markets that Enagás has already identified as priorities in our strategic plan. Two operation scenarios, Europe and the Pacific access include Mexico Peru, Chile and the United States and Colombia, maintaining always our strict international investment criteria.

And the fourth pillar is sustainability as the backbone of our entire strategy.

To finalize my presentation, I would like to talk once again about our dividend policy. I think it is our obligation to have a vision beyond the short term, and in this sense, our dividend policy is not just based on short-term growth but on this growth being sustainable in the medium and long term.

We also want our dividend to be paid out in cash and for it to grow steadily over time. As such, we maintain our dividend projections with a 5% growth foreseen by 2020, which is a commitment that we have had. That year, the dividend for an Enagás shareholder would be EUR 1.68 gross per share. Well, on the basis of this figure that we promised by 2020, I can already tell you that for the following period after 2021 and until 2023, Enagás' dividend will continue to grow at least by 1% per year in 2021, 2022 and 2023.

We have taken on this commitment under the following context. Firstly, from 2018, the Spanish gas system will have a net annual surplus and this will allow us to repay the whole debt earlier than expected in an environment of growing demand.

Secondly, Enagás has been developing international activities in an environment that allows it to maintain business risk according to Standard & Poor's at an excellent level. Therefore, it has a diversified EBITDA and a source of recurrent dividends with high visibility.

Thirdly, Enagás has shown a strong deleveraging since 2016, having more than 80% of fixed debt and without any significant maturities. Therefore, financial discipline and strength are fundamental elements in this context. This is what allows the discretionary cash flows that we will generate in the 2019-2023 period will have enough lag so that, in addition to ensuring the commitment of our dividend policy, we can continue to grow in the international arena and therefore have additional flows. We have contemplated different scenarios, and although we will give you more detailed information precisely in the strategic update, I can confirm today that all them contemplate a dividend increase for the 2021-2023 period of at least 1% per year.

The strength of our cash flows also ensures the sustainability of our dividends in the medium and long term and considering also several different scenarios.

Thank you for your attention. If you have any questions, please feel free to ask. As ever, myself, personally, and the CEO and the rest of general managers are present here, we will all endeavor to answer them as fully as we possibly can.


Questions and Answers


Operator [1]


(foreign language) The first question will be asked by Mr. Javier Garrido from JPMorgan.


Javier Fernandez Garrido, JP Morgan Chase & Co, Research Division - Head of Utilities and Senior Analyst [2]


I will simply ask 2 questions. The first one, without wanting to ask too many questions about the strategic presentation, I would like to know what is your forecast with regards to regulation in order to make calculations for cash flow until 2023. And the second question has to do with the news that have been published about the CNMC report recommending a series of financial ratios for regulated companies. Could you please confirm if in Enagás' case, you know what the remunerated regulatory situation would be established by the CNMC? And what would be the debt attributed to that regulated business?


Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [3]


Thank you, Mr. Garrido from JPMorgan. So first of all, what we have done is the following. We have considered different scenarios, but the one that we have published here is a neutral basic scenario, considering our current commitments and with no changes whatsoever in parameters. And since you all have very powerful models that you can use to run different scenarios, so you could do so and consider different stress scenarios and change scenario. And you will all see in all of those scenarios, and we will talk about that obviously during the strategic presentation, but we have enough room to guarantee the sustainability of our dividend. And secondly, I want to say that all the data that we have with regards to rating enforcement, so everything that has to do with debt and so on, according to what the CNMC has established, we abide by. So if needed, we will give you information regarding this point. But what we don't have and don't need to have, not yet, is any details regarding what the CNMC will be doing because, as I explained, there will be 3 phases and the CNMC is right now in the first phase. I'm talking about gas in general. So first of all, they need to give some general criteria that need to be confirmed by the government. The second phase will be to establish a series of methodologies. And finally, reach some specific result. So we're still on the first phase of the CNMC's work. And I think that it's important for them to have a public calendar and we think that throughout 2019 or maybe even 2020, these 3 phases will be completed. And I haven't said this previously, but I will say it now. There is no doubt whatsoever, but the fact that the regulatory period will be fulfilled and all of these things are at least for gas will have change in the regulation in 2021 on the 1st of January. Thank you very much.


Operator [4]


(foreign language) Jorge Guimarães of Haitong.


Jorge Guimarães, Haitong Bank S.A., Research Division - Equity Research Analyst [5]


I have 2 questions. Would it be possible to clarify the CNMC dates that you just mentioned? Those dates for -- by which everything needs to be ready? It's the 1st of January 2021, but I would like to know about how the whole process is going to be organized. Do you have -- can you give us some hints as to when the draft is going to be available regarding what's going to happen? And secondly, in your cash flow forecast, you have the cash flow for the Gasoducto del Sur in Peru. So if we don't get -- if we don't get to an agreement, what would happen in this alternative scenario?


Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [6]


Thank you very much. The CNMC has made public, and by the way, this is something new because for the first time ever, the regulator has published a highly detailed calendar. They started working in the month of June. They started developing their work back then. But I don't have the information as to exactly how long it'll take them to complete the whole progress. The Chairman personally told me that they were going to make an effort so that, over the year, they would meet the different landmarks in the calendar. But I can't tell you anything else other than that. But at any rate, we think that the fact that there is a calendar or a time line in place with the explanation of the different actions that will be completed, this is already very positive and we can state ourselves that we have undertaken our internal work already. We have started with our internal works so we can provide any information required from us. But I already said that there are 3 perfectly defined stages in this time line and they need to be complied with for each sector. There's a first stage in which they need to make sure that the strategic pillars -- that the regulator has are coherent with the energy -- strategic policy of the government. I don't think that will be a problem. The second pillar would be for the specific methodologies to be released for different subsectors. And the third pillar, the third building block, once this is approved, would be about getting more granular and then we would discuss the regulation at a detailed level. But we haven't received any specific dates or figures from the CNMC in this regard. And when methodologies are created, we will, of course, deliver information or take note of the different methodologies. And in the third phase, it will happen that the regulator will create a general proposal for each sector or company. And at a point in time, we will be heard, we will share our opinions and we'll discuss the figures. But at this point in time, we are not that -- we are not at that stage yet. I think the stage will take place throughout 2019. But I cannot tell you whether we will have the final results in 2019 or early 2020, and I'm talking about the gas sector here. But once again, I would like to underline that the fact that we have a detailed time line, even though we don't have any mathematical dates, is quite relevant. And the processing time can be quite lengthy. I mean, this is something that the Chairman of the CNMC highlighted they are going to be very attentive to the different opinions that will be shared with them and this is why we don't have any specific dates as of the duration that this will have, the length. But the CNMC will try to tackle the works throughout 2019. So in some cases, before January 2020 and perhaps, in some cases, a bit after 2020, we will have the different results. Now regarding the issue of the cash flow, this is quite convenient that you asked that because we have actually created a basic cash flow scenario under a normal scenario. But if you subtract this EUR 400 million to consider that this won't materialize in this period, we would have quite significant room for maneuver so that we can face our different obligations. We have pondered different scenarios and I encourage you to consider them, too. And we will be able to discuss them in due time in the strategic update.


Operator [7]


The first question in English comes Harry Wyburd from Bank of America Merrill Lynch.


Harry Peter Wyburd, BofA Merrill Lynch, Research Division - VP and Junior Analyst [8]


Two for me. The first one is just a clarification. I know this was asked already, but I'm afraid I missed the answer or I misunderstood. Can you just confirm, on the cash flow target for 2023, does that assume that regulatory revenues stay for that or does it assume some kind of cut to regulatory revenues? That's the first question. The second one is just from a very general perspective, the electricity regulatory review is a year ahead of the gas regulatory review. We now have a relatively good view of what the revenue cuts will look like for your electricity colleagues. Do you think it's fair to assume that the level of cut in terms of the level of cut to revenues or the percentage cut to revenues in electricity is a fair benchmark for what might happen with gas? Or are there different circumstances that you think there are in the gas market, which would mean that the change in revenues might be different to what we've seen in electricity?


Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [9]


Thank you very much. Let me explain this once again. In this basic cash flow scenario that we have considered, we considered that there would be no regulatory changes and that we would not have bigger investment commitments than those that we currently have. So it is a basic situation and this gives us important room for maneuver so we can make other investments or we could even phase changes in the regulation or we could even pay back our debt. And this is a scenario that we have considered as a basis for our stress model. So this is a basic scenario, version one, with no changes regarding the current situation. So no changes, no positive, no negative changes and we're not investing more or less. So this is the basic scenario. And from then onward, we have done different considerations with more or less revenue, and in all cases, we think that we can give a good mid- to long-term vision where our dividend is sustainable. Now as for the second question. During the meeting -- the formal meeting I had with the CNMC's President, he, obviously, did not give me any specific data with regards to regulation of the gas sector. And made -- I would like to repeat this once again because the CNMC has designed a project, a work project, where the second phase will be defining methodologies, methodologies that did not explain what the final results will be, but do set a trend that has to be followed. So we will be vigilant, and once they have presented their strategies and we see that both CNMC's and the government's strategies are consistent and are coherent, then we will start giving them all the information that they require with regards to methodologies and then we will start the specific regulation of its subsector and within its subsector for each company. So currently, we honestly don't have any information regarding what could be the basic data or the benchmark that will be used in order to define the new regulation. Obviously, the CNMC, ever since last year and during this year, have been publishing some general notes on their way of tackling the issue, but I insist on the fact that the calendar that the CNMC has published is not just a calendar, but it's also a modus operandi, so the way they will be working, and what you're asking us to say, what we would all like to know, will be the information that will come out of the methodologies that they have to define and then it will be fine-tuned for each sector. And then in the gas sector, if there are no philosophical changes, it is obvious that all of the current regulation was based on 2 main criteria: not increasing tariffs and the toll; and the second, to avoid the yearly growth of our tariff deficit. And if possible, we would try to eliminate that tariff deficit with time. And these objectives are being fulfilled. So it will be for the regulator to determine what will be the new general objective framework, and within this general framework, what will be the formulas that will be applied. I can assure you that we, at Enagás, have guaranteed a total transparency to the regulator and we're open and willing to give them -- to provide all the information that they require. And I have to honestly say that the regulator has shown the best of will for this dialogue to be kept on going. So for the first time, I think that we are going to have a very orderly regulation process with phases that are known to all of us. And now, I know that when people get a calendar, they want the results to be given to them immediately. But allow me to joke about this. It says so in the Spanish football league, we knew when the matches are going to be played, we know what the calendar is, we know what the rules are going to be. But we don't know what the final result of those matches will be. We will have to wait.


Operator [10]


The next question comes from Arthur Simon (sic) [Arthur Sitbon] from Morgan Stanley.


Arthur Sitbon, Morgan Stanley, Research Division - Equity Analyst [11]


I have two. The first one, maybe you will want to wait for the next few weeks to answer, but I'm trying anyway. I was wondering if you have any assumption regarding a step-up of international investment to get to your 1% CAGR dividend growth commitment for 2021-2023. And the second question, I was wondering about the impact of the upcoming Spanish elections on the regulatory review for gas, especially on timing, given you say that the first phase has to be discussed directly with the government.


Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [12]


Well, thank you very much, Arthur. I would like to go over this again. For this basic scenario, we've taken into account that the strategic update will happen in 2, 3 weeks. But on purpose, we have conducted an examination of this scenario without any investment commitments. We consider that the company is run like a ship and it keeps on going with the current commitments that it has today. We have included perhaps additional commitments that we with GNL Quintero or the Trans Adriatic Pipeline, but we haven't set a figure for it precisely because what we wanted was to see the availability of funds that we have, making sure that we can assure our dividend policy. And it remains clear that we have very high availability, the way we see it, in this scenario. So we will, of course, take scenarios regarding the type of revenues that we think we can have or the type of investments that we think we can have. But we have created this basic scenario so that you can use your models and your figures to see yourselves that we have enough slack and enough room for maneuver in order to face these policies. It's very important to also remind you that we can do this because we have 3 pillars that actually work for us, 3 backbones. We have solid cash generation. Every year, we have international revenue that, in addition to the significant regulated income that we have in Spain, allow us to phase all the growth that we have. And thirdly, it is also important to consider that in the last 2 years, we've conducted an important deleveraging process, which allows us to have even more room for maneuver. So that's the base for this. And regarding the elections, well, quite honestly, I think that since the government has decided before due time to transfer these functions to the CNMC, and by the way, this has already been recognized by the Parliament, it went a bit unnoticed. But the Royal Decree issued by the government has already been approved by the Parliament. And given the situation, we can all rest assured, I think, because the elections, in principle, shouldn't have an impact on the work to be conducted by the CNMC. It is also true that the CNMC has already given us their calendar precisely, I think, to reassure us and I don't think there should be any changes in the scenario. Of course, a new government can do different things compared to the previous government and that's the basis for democracy, of course. But the current decision made by the government stems from a request, a constant request, by the European Commission. And I think that with this government or a different government, there will be no changes in -- on this topic. So I think the regulatory scheme and the calendar that we mentioned will progress without any issues irrespective of the results in the elections, a new government coming into power, et cetera. That's why I say what I said in my initial speech, they haven't transferred part of regulatory functions, the day-to-day functions, to an independent body has an advantage. One of the advantages is that this body, by definition, doesn't have to work on the basis of the political agenda because there's parliamentary questions every day, there are replies that are needed, there are government initiatives and so on. But the CNMC already created its calendar, already said at the circulars that they are going to be working on, they have explained that they're going to conduct methodologies. And I think the energy sector, as a whole, compared in the field of regulation, is now a bit separate from the political day-to-day. Secondly, there's things such as energy transition loss and agreements that the European Union will establish with the member countries and that -- those are things that will be duly considered, but this is not something that will happen overnight. It's something that will take 3, 4 years and discussions in national parliaments and the European Parliament will be a requirement. And from those discussions, we will obtain objectives for 2052. And this is something that will have to do with the elections that will also take place not just in Spain, but in Europe as a whole. But regulation for regulated companies in the energy sector, in the short term, and this is my personal opinion and I think I'm right in thinking so, I think we're going to be reasonably independent from day-to-day political business. I think, Arthur, I managed to answer your questions perhaps with these comments. Thank you.


Operator [13]


I'm afraid we can't hear the question that is being asked. I'm afraid no sound is getting through the booth, so we can't translate the question that is being asked.

(technical difficulty)

Once again, we are sorry, but we cannot hear the question that is being asked.


Antonio Llarden Carratalá, Enagás, S.A. - Executive Chairman [14]


Good morning. There seems to be some technical problem. Particularly, there is a specific question that is being asked. The Investor Relations team knows who is the person who asked that question, but there was a technical problem and we couldn't hear the question. So Investors Relations is going to answer the question. But in any case, we are obviously open through our Investors Relations department to provide you with all the complementarity information that you require or any questions that you may send our way. So thank you very much for listening, and we are here for you. Thank you very much.


Operator [15]


So we close.